CORPORATE | Business lease or commercial lease? The Milan Court of Appeal clarifies the criteria for contract qualification

In its judgment No. 632 of 16 March 2025, the Court of Appeal of Milan addressed the distinction between a business unit lease agreement (contratto di affitto di ramo d’azienda) and a commercial lease (locazione commerciale) governed by Law No. 392 of 27 July 1978. The Court held that the mere existence of an administrative authorization and the location of the rented premises within a shopping mall are not, in themselves, sufficient to establish the existence of a business unit. Rather, the determining factor is whether an organized set of assets functionally capable of supporting an independent economic activity exists.

In the case at hand, the Court reclassified as a commercial lease a business unit lease agreement concerning the lease of a portion of a real estate property intended for use as a café-bar. Despite the existence of a prior administrative authorization and the renewal of the contract in notarial form, the Court found that the leased premises lacked autonomous productive capacity and therefore did not constitute a business unit.

This decision reaffirmed the principle that the legal classification of a contract depends on its substantive content rather than on its title or form, and it also emphasized the importance of evaluating whether the leased assets are genuinely suitable for the independent operation of an economic activity.

Newsletter n. 107 – May 2025