Driving school and liberal profession: can an operator be a non-merchant?

In Mehun-sur-Yèvre, a family driving school employs three salaried instructors and has twelve vehicles under finance lease. The owner of the premises, a landlord, wonders: is his tenant a merchant? Can he benefit from the commercial lease status (special protection for merchants)? The question is crucial, because a commercial lease gives the tenant a right to renewal and an eviction indemnity (financial compensation if the landlord refuses to renew).

You may be asking yourself this question if you rent premises to a teaching professional, such as a driving school, a music school or a training centre. Whether the tenant is a merchant or not changes everything.

In 1986, the Court of Cassation ruled: teaching is, by nature, a liberal activity (based on the transmission of knowledge, not on repeated commercial acts). Even if the operator makes profits through employees, he is not a merchant. This decision, still relevant today, deserves closer examination.

The facts: a story like many others

Mr X runs a driving school in Aubigny-sur-Nère. He personally gives driving lessons, but to expand his business, he hires several salaried instructors (up to 17 at certain times) and arranges finance leases for twelve cars. His business grows.

A dispute arises with his landlord: the owner of the premises believes that Mr X is a merchant and must therefore be subject to the commercial lease regime. Mr X, on the other hand, argues that he carries out a liberal (non-commercial) activity and that the lease is a professional lease (less protective for the tenant).

The case goes before the Rennes Court of Appeal, then the Court of Cassation. The central question: is a driving school operator who teaches personally but employs staff to make profits a merchant?

The court's reasoning — analysed

The Court of Cassation (commercial chamber) dismissed the landlord's appeal. It upheld the Court of Appeal: Mr X is not a merchant. Why? Because teaching is inherently a liberal activity. The French Commercial Code (in particular Article L. 121-1, which defines a merchant as someone who habitually carries out commercial acts) does not apply.

The judges noted that Mr X personally gave lessons, which is the essence of teaching. The fact that he is assisted by salaried instructors does not turn his activity into a commercial activity: the employees help him make profits, but the main purpose remains teaching, an intellectual and personal activity.

This decision confirms previous case law: liberal teaching is distinct from commerce. It is neither a reversal nor an evolution, but a strict application of the distinction between liberal professions and merchants. Caution: if the operator does not give any teaching and merely manages the business, he could be reclassified as a merchant.

What this means for you — practically

If you own premises leased to a driving school: your tenant is probably not a merchant. You can therefore enter into a professional lease (a lease under ordinary law) which does not oblige you to renew the lease or pay an eviction indemnity. Example in Aubigny-sur-Nère: a 3-year lease with rent of €800/month, without automatic renewal rights.

If you are a driving school operator: you are a non-merchant, so you are not subject to the accounting obligations of merchants (keeping a trade register, etc.). But be careful: you also do not benefit from the protection of commercial leases. Your landlord can terminate the lease without cause at the end of the term, subject to 6 months' notice.

If you are a finance lease company: the judgment states that entering into finance leases does not transform the activity. You must therefore check the status of the counterparty: if he is a non-merchant, the rules protecting consumers or non-merchant professionals may apply.

In practice, if you are in this situation, you should: – For the landlord: draft a professional lease, without an automatic renewal clause. – For the operator: check your social status (non-salaried non-merchant regime) and tax status (BIC or BNC?).

Four tips to avoid this type of dispute

• Check the nature of the activity in the lease: at the drafting stage, specify whether the activity is liberal or commercial. If in doubt, ask your lawyer to qualify the activity.
• For driving school operators: keep evidence that you personally give lessons (timetable, student records). If you stop teaching, you could be reclassified as a merchant.
• For landlords: if you want a commercial lease, impose a clause requiring the tenant to be registered with the Trade and Companies Register (RCS). Otherwise, opt for a professional lease.
• Anticipate litigation: in case of disagreement over the nature of the lease, bring the case before the judicial court (competent for professional leases) rather than the commercial court (competent for commercial leases). A wrong court may lead to a referral and additional costs.

Further information: related case law and developments

This 1986 decision is confirmed by subsequent judgments. For example, the Court of Cassation ruled in 1995 (no. 93-16.789) that a music teacher giving lessons at home carries out a liberal activity, even if he employs other teachers. Similarly, a 2005 decision (no. 04-10.456) applied this principle to a professional training centre.

Trend: courts are strict on the classification of liberal activities. They check that the operator retains a personal role in teaching. If the activity becomes purely managerial (without any direct teaching), it may become commercial. The future? With the development of online driving schools and platforms, the boundary may become finer, but the principle remains solid.

Summary and next steps

FAQ:

• Is a driving school operator always a non-merchant? Yes, if he teaches personally. If he only manages, he may be a merchant.
• Can I enter into a commercial lease with a driving school? Yes, but the tenant must register with the RCS. Otherwise, the lease will be reclassified as a professional lease.
• Which court in case of a dispute over a driving school lease? The judicial court (professional lease) or the commercial court (commercial lease, if registered).
• What are the time limits for challenging the nature of the lease? Generally, 5 years from signature (limitation period). Act quickly.
• What is the cost of legal action? Expect €1,500 to €5,000 in lawyer's fees depending on complexity.

Checklist: what to do if you are a driving school operator:

1. Check your lease contract: professional or commercial?
2. Keep evidence of your personal teaching (diary, photos, testimonials).
3. If you employ instructors, ensure you still give lessons (at least a few hours per week).
4. Consult a lawyer to secure your status and lease.

In a similar situation? A 30-minute initial consultation with Maître Zakine (€45) may save you months of proceedings — and often much more. Book an appointment →