There are so many factors that need to be taken into account before opening a coworking space: from choosing the space, its layout, location, and the services that it's going to offer to the legal aspects that you need to consider.
Coworking is a relatively new industry that is constantly evolving, and often there is no legal framework that fits with its model, characteristics and needs. New space founders and managers can often find themselves scratching their heads when it comes to contract types, the legal safety requirements for spaces, how to deal with disputes, etc. The Google group for Coworking is very active and many space founders and managers share their experiences, which can be really useful for someone who is starting out or stumbles upon an issue during the early stages.
It's difficult to draft a guide that can be applied everywhere, given that laws and regulations can change from one country to another. However, we've collaborated with Legalcoworking, a legal consultancy firm based in Tarragona (Spain), founded by Maica Cabello (lawyer) and Laia Benaiges (Espai La Magrana coworking space founder), and put together a guide for people who are thinking about opening a coworking space. The short guide is in not legally binding in any way but gives useful advice about the legal aspects that should be considered before opening or growing a coworking space.
NOTE: This guide outlines the legal and administrative aspects, in a chronological order, that coworking space founders should consider before opening a space. This guide has been written in accordance with some procedures that have become standard in most coworking spaces, notwithstanding any specific legislation of the country where the coworking space is located."
Why does coworking need a specific regulation?
Relationship between the coworking space and its coworkers
Coworking contract content
Recommended house rules
Possible conflicts that should be mentioned in the protocol
1.- Why does coworking need a specific regulation?
Coworking is a way of working that enables freelancers, entrepreneurs and small and medium companies to share space, and promote collaboration and business opportunities.
This definition helps us understand why coworking spaces are different from business incubators, business centres or traditional offices. The following really make a coworking space different from a shared office: the type of professionals who work there, the fundamental role of the space manager, the links forged between the coworkers, parallel activities organised by the space, and the relationships built in the community.
Without all of the above, coworking cannot exist. However, these elements also generate the need to create a specific regulation for this emerging sector, which is constantly changing. Every coworking space should possess a series of legal documents that make it easier for coworkers to work in harmony alongside one another and prevent conflicts between space managers and coworkers. Although there is usually a relaxed working environment in coworking spaces, a basic degree of control is needed. Understandably, rules need to be clearly set to ensure that both parties have peace of mind and to prevent conflicts.
This document offers a guide to legal aspects that could be useful for a coworking space. Please remember that this document is merely a guide, and is not legally binding in any way. Each country may have its own specific regulations in force. This guide has been drafted based on the steps you need to take should you be considering opening a coworking space, from choosing the premises to regulating the relationships between coworkers and space managers and founders and coworkers.
2.- Coworking space
Before you rent or buy the premises that you'll transform into a coworking space, you must consider a series of aspects, which are outlined below:
- Business license: Your business licence will often depend on the town or city where your coworking space is based. You must check that you are permitted to set up a coworking space in the premises that you choose. You must also consider the coworking space's height and surface area because this may influence how your business activity is categorised. Furthermore, it is likely that you will have to present the technical specifications and meet certain fire protection and accessibility requirements.
- Fire protection regulations: The premises must comply with certain aspects, such as the minimum number of emergency exits, maximum distance to escape routes, the structural fire resistance, emergency lighting, extinguishers or other aspects that must be considered in accordance with the legislation in force in the country where you wish to open your coworking space.
- Accessibility: You need to ensure that the coworking space is accessible for people with reduced mobility and that adapted toilet facilities are available. These regulations will vary depending on the country where your coworking space is based. Remember that spacious areas with no steps are more comfortable for everyone.
That is why it is really important to ensure that the surface area, electrical installations and air conditioning/heating installations are suited to your project. This will make the administrative side easier and minimise the need to carry out construction works, which in turn will save you money.
We cannot stress how important it is to ask a specialist about the characteristics with which the premises must comply. You should check with a reliable engineer or architect that the premises comply with local regulations and ask them to give you an idea of the works and/or installations that you need so that you can obtain the licence before renting or buying a property.
Before starting, it is really important for the coworking space founders to choose the legal form they will operate with. If you are going to be a sole founder, you can choose to be freelance, as it is the quickest and easiest way to start your business activity, or you can create a sole-trader company. If there are two or more founders, you probably should create a limited company.
You must check the different legal forms that exist in the country where you are going to open your coworking space to ensure that you choose the best option for your project.
Relationship between founders: founders' agreement
If you decide to set up a limited company, drafting a founders' agreement is recommended. The founders' agreement prevents situations of deadlock, and outlines the procedure for potential situations such as one of the partners leaving the project and setting up something similar or failing to comply with the agreement. The FOUNDERS' AGREEMENT can be drawn up at any time but you are recommended to do so as soon as you start working on the project. It does not have to be formally drafted but you should get the document notarised.
You may also find that you need to draft a collaborators' agreement when you start working on projects with other professionals, which is common in a coworking space.
4.- Business activity
The next step is to register your business activity with the competent tax authority. You must consider the various activities that are undertaken in your coworking space, because 'coworking' itself does not usually exist as a business activity. Office-related business activities are often included but you must also evaluate the parallel activities that are organised in a coworking space (for example, events, parties, bars or exhibitions) to evaluate whether you have to register those too.
This guide was written by lawyer and coworker, Maica Cabello, and Laia Benaiges, a freelancer specialising in digital communication and founder of Espai La Magrana coworking space. This guide is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
See more at 101 legal guide for coworking spaces (II).
Main photo source: Mari Helin-Tuominen