Business Tenancies - What is a Business?

The question as to what sort of organisations can be regarded as businesses came before the courts in a case involving a not-for-profit company which had failed to give the required notices to protect their tenancy under the Landlord and Tenant Act 1954.

When the company sued the firm of solicitors who had failed to secure their renewal of leases over two sports grounds, the solicitors argued that the organisation had suffered no loss since they were a not-for-profit organisation and therefore would not qualify for the security of tenure available to businesses under the Act.

The court disagreed, concluding that the intention to make a surplus which would be reinvested in the leisure complex run by the not-for-profit company was sufficient to make it a business, in spite of the fact that any surplus arising was not distributable to the members of the company.

For the purposes of the Act, a 'business' need not be an organisation established for profit.

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