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Commercial Leave & License Agreement (Drafting)





A leave and license agreement is an agreement wherein the licensor allows the licensee to temporarily occupy and use one portion of immovable property for carrying on his business or residential purposes.


Section 52 of Indian Easement Act, 1882 defines License as under:

“Where one person grants to another, or to a definite number of other persons, a right to do or continue to do, in or upon immovable property of the grantor, something which would, in the absence of such rights, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.”




1. LEGALLY ENFORCEABLE : Leave and license agreement is legally enforceable agreement. On the breach of any terms and condition of leave and license agreement by licensor or licensee they both can sue each other on the basis of Leave and license  agreement.


2. ADDRESS PROOF : Commercial leave and license agreement is a authentic proof for your Private limited/LLP/ or any other business entity as a registered office.


3. CLARITY : A registered leave and license agreement ensures that neither the tenant nor the owner can go back on their commitments or exceed their stay in case of a dispute.


4. DEDUCTION FROM BUSINESS INCOME : For authentic deduction of income from business Auditor/CA may ask for leave and license agreement. Leave and License agreement mention specific clause regarding rent so it will help you in case of deduction of rent from business income.


5. GST REGISTRATION : Commercial leave and license can also be utilized for GST Registration as an authentic proof.