It is important to note that a management contract is not an employment contract from a legal point of view. If this is nevertheless the case, Dutch labour law applies to the contract for the management of the undertaking. This means, among other things, that the legal provisions on termination, leave and health protection apply to the management contract. In addition, the classification of a management contract as a disguised employment contract is subject to tax consequences. It is therefore important to clearly separate the management contract from the employment contract. Normally, in the case of a holding company and an operating company, you would “hire” holding bv for “administrative services”. The company sends an invoice to Operate bv (usually a monthly fee). These fees in themselves are not subject to employment or income tax. However, this income in the holding company could lead to a profit in the holding company, which is subject to corporation tax. For this to work, you actually need a management contract. We can design one for you. The lead director/shareholder will receive a salary from the holding company and not from the operating company.
The salary must be reasonable (if there is sufficient income on the farm, this must be reflected in the farm`s salary). I wrote more about the salary of the shareholder/lead director in our guide. In order to be able to conclude that the management contract is not an employment contract but a service contract, it is important to know whether there is a relationship of competence between the parties. The management contract is not expressly regulated in the Dutch Code. It is generally accepted that the management contract in the Netherlands is a service contract. The statutes of the service contract are largely non-mandatory and therefore separable laws. There is therefore a great deal of freedom in the design of contractual provisions, which makes the design and design of a management contract very flexible. The drafting of a management contract in the Netherlands is therefore tailor-made. It is therefore all the more important that you use the support of a lawyer when concluding a management contract. The lawyers at MAAK Advocaten specialise, among other things, in contract law and can provide you with the best possible support in drafting your management contract. A lot of things. You can think of it as a kind of employment relationship, but without all the obligations and rights that come with formal employment.
This makes it possible to include a wide range of provisions. For example, you can enter into confidentiality agreements and accept that the manager is not employed by a competitor after working for the company. If the management contract is only intended for your own use in your holding structure, such provisions are generally not necessary. In practice, however, this leads to many discussions. The intention of the parties when concluding the management contract and how it will be implemented are important. Relevant aspects are, for example, whether the contractor uses his own equipment, whether the contractor continues to be paid in the event of illness and vacation, if the contractor bears an entrepreneurial risk, and if the contractor performs work for several clients. Practice shows that the conclusion of a management contract is very popular in the Netherlands. The decision to carry out work on the basis of an administrative agreement is intended to promote both independence and flexibility. In addition, the management agreements are favourable from a tax point of view. In the following, our Dutch corporate lawyer will inform you about the most important features of a management contract and explain what you need to pay attention to when concluding a management contract.
The management contract governs the relationship between a manager and a limited liability company BV. In practice, this is often used in a holding structure called BV. In this case, there is a BV Holding company that holds some or all of the shares of an active BV. Holding BV is owned by the natural person behind the company (the founder UBO). HoldingGESELLSCHAFT BV performs administrative tasks for the operational BV. This relationship is defined in an administrative agreement. The managing director (the holding company) sends the invoices for his work to the operational BV. A management contract in the Netherlands is a contract in which a company – also known as an operating company – and a managing director, a main shareholder or a managing director agree. However, practice shows that the managing director, the main shareholder or the managing director uses a management BV. In this construction, the general manager, the main shareholder or the manager is hired through Management BV to carry out work for the operating company.
The respective tasks must be included in detail in the contract. Management is then independently tasked with performing the tasks specified in the contract. A management contract can benefit your business in several ways. When drafting the administrative arrangement, it is important that there be no doubt that it is an administrative arrangement. Since the preparation of a management contract requires an individual adjustment, we always recommend that you consult a lawyer. MAAK Advocaten has experienced lawyers in corporate law as well as contract and liability law. These lawyers are specialists who can assist you in drafting a management contract or analyze contracts already concluded. Veel voorkomende woorden: 1-300, 301-600, 601-900, Meer In practice, Holding BV, which is the managing director, will in turn employ its owner with an employment contract. Frequente korte uitdrukkingen: 1-400, 401-800, 801-1200, Meer MAAK Advocaten – Dutch and English-speaking specialist lawyers in Amsterdam Phone: +31 (0)20 – 210 31 38E-Mail: mail@anwaelte-niederlande.de Contact: Renso van Wieringhen Borski | Lawyer Takeover of business and company law.
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