The Company or Business Branch Lease Agreement is the agreement by which an entrepreneur grants a person the availability and enjoyment of a complex of assets organized for the operation of a business, in exchange for a fee.
The civil code reserves for this contract only a provision (art. 2562 of the civil code) which governs the obligations of the tenant. Although not regulated, the rules on the rental of a productive asset are applied (articles 1615 and following of the civil code) and those dictated for the sale of a company (articles 2558, 2559, 2560 of the civil code).
The business lease contract must be stipulated in written form with a public deed (or authenticated private deed) and must be entered in the Register of Companies, by the notary within 30 days following the operation.
Business leasing can be a very advantageous tool:
- the entrepreneur decreases his own economic-financial risk deriving from the initial investments made in exchange for a constant return (periodic rent), with the hope of maintaining or increasing the value of the company;
- the new manager has the opportunity to undertake a new business without making any initial investment, using the assets and know-how present in the rented company, with the burden of maintaining its efficiency and profitability, with a view to conservation of the plants and the organization.
When using the company or branch lease agreement
The company (or business branch) lease contract is used when the owner wants to transfer the management of all or part of the company (branch) to another entrepreneur for a certain period of time, while maintaining ownership, without that the debts accumulated by the owner weigh on the new manager.
You can rent any company or even just a portion of it (in that case we speak of a business branch), but only if the characteristics of the part of the company distinguish it as a unitary complex of assets characterized by its own organizational autonomy.
Business leasing can therefore help overcome a business crisis and ensure business continuity or it can represent for those who rent a company the intermediate step before buying it and checking the deal. It is also an excellent means to allow the generational change and verify the entrepreneurial ability of one or more family members, guaranteeing management control.
How the company lease agreement works?
The following effects arise from the conclusion of the rental contract:
- the new manager (tenant) automatically takes over the stipulated contracts that are not of a personal nature, unless otherwise agreed, and in employment relationships;
- the tenant is only liable for debts accrued after the signing of the rental contract until its termination;
- the old manager (lessee) does not transfer the company credits and debts of the past management, unless otherwise agreed;
- the lessee maintains a right to control the correct production management;
- the tenant cannot compete with the tenant.
Furthermore, the new operator is obliged to maintain the efficiency of the organization and the plants and maintain their functioning unchanged. To this end, it must:
- maintain the normal stock and warehouse equipment, if they fall within the lease contract, in order to preserve the functionality, productivity and profitability of the company;
- provide for the necessary maintenance and replacement of the systems;
- respect the destination of the company, without modifying the object and the activity.
What does the business lease agreement model contain?
Our business lease agreement meets all legal requirements. The main clauses concern:
- Object and initial inventory: description of the company or branch of the company and of all the assets that compose it and that will be leased (intangible assets, tangible assets, contracts, employees, etc.)
- Real estate: the choice of how to manage the properties where the business is carried out
- Debts and credits: credits and debts arising under the previous management are due only to the lessee, while credits and debts arising under the new management are borne by the tenant
- Management obligations: all the constraints and commitments undertaken by the new manager are indicated
- Guarantees: the tenant can issue a surety or pay a deposit to guarantee the fulfillment of obligations
- Prohibition of competition: for the duration of the contract, the parties undertake not to undertake new initiatives that could mislead customers. The new manager will not be able to compete even for a certain period of time following the expiry of the lease
- Duration: there is always a limited duration with the possibility of automatic renewal
- Fee: to establish the amount and methods of payment of the installments
- Purchase option: the possibility of allowing the tenant to decide, by the established date, to purchase the company or branch at a predetermined price
- Prohibition of subletting and assignment: to prohibit subletting or assigning the contract to third parties, without the written consent of the tenant
- Redelivery and final inventory: to establish the rules for the return of company assets and for compensation in the event of differences between the initial and final inventory
At the end of the interview we will guide you step by step through the subsequent formalities necessary for your company lease contract to be duly constituted and registered.
Information you need
All parts and company data are required to complete the document. After creating the document, it will be necessary to attach to the contract a complete list of all the assets (both tangible and intangible) that make up the company and that are leased.
Remember that our interview does not generate a simple facsimile of a company lease agreement. Based on your answers, the system automatically draws up a customized contract model for your exact needs, guaranteeing its legal correctness.
The document can be modified in all its parts without time limits. Don’t worry so if you don’t have all the information available during the interview, you can always enter it later.
Other useful templates and facsimiles
- Preliminary Contract for the Sale of a Company: to stipulate the definitive contract for the sale of a company (or a company branch) by a certain date
- Preliminary Agreement for the Sale of Units or Shares: to undertake to enter into the definitive agreement for the sale of a shareholding by a certain date
- Non-Disclosure Agreement: to protect you if you have to share confidential information
- Letter of Intent (Memorandum of Understanding): to define the current status of a negotiation and regulate its continuation
- Outsourcing contract (outsourcing): to entrust activities or some phases of the production process of your company to external parties