A shared office space is a legally bound business and GST applies to co working too, now that the government has made that mandatory in India. In addition to taxation permits, below are five aspects of the co working agreement that owners consider.
Lease or Service
Owners specify the duration of user agreement they want with the tenants and sub-lease the property to tenants after a general consensus is met. However, owners also provide shared office space as a service and give an operating license to the tenant. Lease agreements give more right to the lessee regarding the property usage and therefore are difficult to cancel. Besides that, lease agreements give operating license and limit tenants from accessing the property.
More than just providing quality work space, a user agreement covers the specifics such as the number of seats, cost per seat, internet facility, access to cubicles, etc. Disputes may arise if temporary interns or gig economy starts to work on a contract basis, so users specify everything in the co working agreement right up.
Owners specify how users should pay rent either through cash or bank transfer. If overage charges for high-speed internet or for video conferencing will incur, owners specify that too in the co working user agreement. Further, if owners intend to escalate prices periodically, then they would clearly specify when the price escalation impact. As GST has arrived, there would be a change in service tax and that would affect prices of setting up a shared office space in India.
Being the owner of the shared office space, you can indemnify the office assets and preempt natural hazards. Furthermore, owners can collaborate with other companies and tell them to get insured sooner. Both parties should be clear about who is liable to pay for the damages, say when an electrical surge or theft occurs in the future. No one can avoid the hazards, but insurance would safeguard mutual workers and the property.
Breakaway and Termination Clause
While some leave shared work space due to any reasons, the agreement codifies the termination clauses and the duties of either party when breakaway happens. Either community managers specify a lock-in period, before which a co working agreement cannot be revoked, alongside notice period and treatment of deposit in the mutual agreement.