If you are using Web Application, then App_Code does not apply. App_Code is for Web site only. The reason is that App_Code is the only folder that is actually compiled so that's where classes should go. In Web Application all files are compiled, so classes can be placed anywhere and hence there is no need for the dedicated folder. In order to use Class library (which is better idea than App_Code anyway), add a reference to the Class Library project in your Web Application.
Thanks
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