Indivisible asset: right of pre-emption in the family business

Article 720 of the Italian Civil Code governs the distribution of indivisible real estate assets within an inheritance. It establishes a preference for assigning such assets to the heir with the largest share of the estate. This principle has been broadly interpreted by courts to also apply to commercial businesses owned by the deceased (the de cuius).

Before any assignment, the business must be evaluated by a qualified expert to determine whether division would significantly harm its economic value or goodwill. If it's found that splitting the business would be detrimental or impractical, the next step is to determine which heir should receive it.

Following the extended interpretation of Article 720, preference is generally given to the heir holding the largest share of the inheritance, provided they compensate the others for any amount exceeding their entitlement.

However, according to well-established case law, judges have the discretion to deviate from this criterion. They may assign the business to one or more heirs who were actively involved in its operations, even if they do not hold the majority share. This discretion must be justified, typically by referencing the need to preserve the business’s continuity.

The professionals at Agenzia delle Successioni are available to assist heirs facing such situations. Requesting a consultation is easy just fill out the form on our website.