Starting a coworking space can be rewarding but also incredibly challenging, particularly in the early stages of your journey. It is hard to focus on creating a great experience for your coworkers and building a service for your community when you're also trying to manage finances and address numerous legal requirements.
Our mission at Cobot is to simplify the lives of independent coworking space owners and operators by providing the most intuitive and easy-to-use coworking management software. We started our own coworking space more than 15 years ago and know what the most challenging struggles are for new operators. This is why we have compiled this one-page legal checklist (PDF at the end of the article), which goes through some of the most important legal areas you have to consider when starting a new coworking space.
Laws will differ between countries and even regions, but this simplified view can be your guide in navigating through the legal jungle so you can focus on the more important aspect of your business - your community and the experience you provide.
We have decided to break down these legal suggestions into four different sections: Business, Onsite, Customers, and Online requirements. You will find more information for each point later in this article under the graph:
Business Requirements
Ensuring the legal compliance of your new coworking space starts with business law. Here are the most important areas you have to cover:
Legal Structure and Registration
What legal structure suits your coworking space? Are you running it as a private business, cooperative (co-op), or a non-profit?
Most jurisdictions require a business/trade license to operate legally. Have you applied for one in your city or region?
Research what mandatory insurances are required (for example liability insurance). Depending on your offerings, you might also need property insurance, workers' compensation, and more.
Licenses and Permits
Depending on the type of service you provide (e.g., serving food or hosting events) and the setup of your coworking business (do you own or lease the property?), you may need to obtain specific licenses from local authorities.
Rental or General Contract Law
If you rent out spaces you should know about the details of rental law to understand your obligations, future costs, and rights as a tenant. Business rental is usually less protective for renters, so make sure to understand your agreements.
If you have a management agreement for a property, make sure you understand the nuances and legal definitions of your contract well to know your obligations and rights fully.
Tax Regulations
Are you ready to tackle taxation? Will you do it personally or work with an accountant? Have you informed yourself about your local or cross-border taxation rules (for international clients)?
Have you registered your business with the appropriate tax authorities?
Do different tax rules apply to the service you provide? (for example, self-served food is taxed lower in Germany)
Invoicing
Is your coworking space prepared to file and receive invoices? Take a look into these helpful articles: The Invoicing Template (Part 1), E-invoices for coworking spaces
Using a coworking management tool can simplify a lot of processes in your new space, for example, invoicing. Consider trying out Cobot and sign up for our 30-day free trial (no credit card required) 🥳
Transparency Rules
Based on your location, what kind of information do you have to disclose or register about your business? What do you have to include in your service offerings or with your business communication?
Employer Rules
If you have employees, have you reviewed local labor laws on wages, hours, and benefits? Make sure your contracts and tax obligations meet legal requirements.
Onsite Requirements
Onsite requirements and your obligations can differ vastly depending on whether you own, lease, or simply operate the property. The key considerations include:
Fire Safety
Most countries require that each building has clear escape routes, proper fire doors, fire extinguishers, smoke detectors, and visible evacuation maps.
Accident Prevention
Ensure member safety by following local accident prevention guidelines, such as managing hazards, maintaining equipment, and providing first aid kits. Important to consider is that different obligations may apply if you are offering makerspaces with specific machinery.
Accessibility
With 17.7% of young people with disabilities in the EU registered as unemployed in 2020, the wider implications of inaccessible coworking spaces also limit opportunities for professional growth, networking, and skill-building. This is why it's important that your coworking space considers your country's regulations on accessibility (wide doorways and hallways, elevators and lifts, height adjustable furniture, accessible restrooms, signage and information, etc.)
Health Codes
Ensure your coworking space complies with local health and safety regulations by maintaining cleanliness, providing sanitizing stations, and ensuring proper ventilation. Implement clear protocols for hygiene, occupancy management, and distancing where necessary. Educating members about these measures will create a safer and healthier coworking environment.
Workspace guidelines
Depending on your business model this might be a legal responsibility of your customers (companies) or not apply to freelancers, however in order to build a good working environment and a successful coworking space, you should consider providing adjustable furniture, good lighting, a quiet environment, etc.
Environment
In order to ensure your space is not only contributing to your local community but also supporting the environment, you must comply with different environmental laws, depending on your size and location. These might include waste management, recycling, and if you are running a larger coworking business or multiple spaces - environmental compliance laws.
Customers
Running a coworking business means that your customers’ satisfaction is your most important goal. Outside of your day-to-day efforts to provide the best possible environment to the people using your space, your company must comply with a series of customer laws:
Business Contract Law
It is crucial to define a coworking agreement between you and your members. We advise you to operate under a service agreement - it is less complicated and protects you more than a sublease agreement. You can read more in our article about Coworking Service Agreements.
Dispute Resolution Policies (between members)
This is not a strict legal requirement, but we recommend creating these policies and adding them to your Terms of Service before signing your first members, in order to prevent legal complications in the future.
Anti-Money Laundering
If you provide business registration services you might be required to run or provide background checks on your members.
Customer Protection Laws
These laws are typically more relevant when dealing with freelancers or single desk renters, instead of companies, but you need to make sure you are clear and concise about the services that you provide (in the Terms of Service) and the validity of this information.
Online Requirements
Privacy & Data
Understand how and where you can store the data of your members and what needs to be deleted once their contract ends.
Cybersecurity
Cybersecurity is a very important topic in today’s world. Protecting your user’s information from malicious attacks is a legal responsibility you have to consider. Scroll down to the “Cybersecurity” section of our Security Essentials article for more information about the topic.
Online Accessibility
Similar to physical accessibility, your company is required to be accessible online to users with different disabilities. We at Cobot already have a comprehensive article on Online Accessibility and the European WCAG 2.1 AA Standard
Feeling ready to start your coworking space? Go for it! It can be one of the most rewarding experiences in your life, and we are happy to be a part of it! Download the free list as a 1-page PDF below.
Want to learn more about Cobot? We are enabling independent coworking spaces to run their operations seamlessly by providing an intuitive and easy-to-use software. Our software also provides an easy-to-use solution for some of your legal processes - Invoicing, Online Accessibility, Cybersecurity, and more.
Book a Free 15-minute Call with our friendly team in your language to learn more 🥳
The 1-Page Legal Checklist for Coworking Spaces
Download the ready-to-print PDF here
