Management Agreement

The question

You bring in a manager or director who does not want to be an employee, or you are that manager. The person works through their own management company or as a self-employed director, and the relationship runs on a management agreement. You need to know what that agreement must say, and what happens if the arrangement is later treated as something else.

The first risk is requalification. National law looks at the real relationship and not at the label. Typical criteria are the freedom to organise working time and work, and the absence of hierarchical control, and the rules differ per country. If the arrangement is requalified as employment, the consequences reach social security contributions, employment protection and the tax treatment of the payments.

The second set of questions comes from company law. A director holds a mandate under the company law of the country where the company is established. Depending on the company form, directors can often be dismissed at short notice or without compensation, unless contractual protection has been agreed, and the articles of association may give more or less room. The agreement must fit the articles, the appointment and the real powers of the manager.

Our approach

We start with the facts: who the parties are, what the manager will actually do, with what autonomy and for whom else. We then assess how well the arrangement resists requalification and adapt the agreement and the way the work is organised. We also read the articles and the decision of appointment, so that agreement and mandate match.

Then come the commercial terms: the scope of the mission, remuneration (fixed, variable or both), expenses, and the VAT and tax angles in general terms, such as whether the management fee carries VAT and how a company director's remuneration is treated. Tax advice on the individual situation is coordinated with your tax adviser. We add exclusivity, a non-compete, non-solicitation and confidentiality. Restrictive covenants must be proportionate in scope, duration and territory. The legal map of these agreements is in commercial contracts: a map.

IP needs separate attention. Copyright and inventions created by someone who is not an employee do not automatically belong to the company. Without a written assignment, the manager or the management company can remain the owner of work made for you. We include a clear assignment or licence, with scope, territory and duration, and a duty to disclose inventions and hand over material. See can I protect my software and finding the IP you already have. If part of the reward is a fee for the transfer or licence of copyright, the tax regime for copyrights may apply, and the agreement must record the assignment properly.

Termination and liability come last: notice periods or a termination fee, what happens on dismissal as a director, handover of files and access, the restrictions after the end, the manager's liability towards the company, indemnification and D&O insurance.

We draft with our the Document Studio, from a short brief, with company data from the registers and a Word export in the firm's structure. An attorney adapts every clause to the deal and the articles. After signature, the rights and obligations register extracts each party's duties with their source clause. A lawyer confirms them and the register sets reminders for notice periods and option windows.

What you get

• A management agreement that matches the appointment and the articles.
• A short assessment of the requalification risk, with recommendations on how the work is organised.
• Remuneration, expense and VAT provisions, with tax points flagged for your adviser.
• Exclusivity, non-compete, non-solicitation and confidentiality clauses.
• A written assignment of the IP created by the manager.
• Termination, liability and D&O provisions, and a confirmed list of obligations and dates.

A lawyer reviews every document. We do not give tax or social security rulings, and we flag where a specialist should confirm a point.

Take a scale-up in Ghent that hires an operations director through her own management company. Her draft agreement sets fixed hours and a reporting line that look like employment, and says nothing about the software tools she will build. We reshape the mission and the reporting, add the assignment of her work and agree a notice period for when the board ends her mandate. The register then tracks the notice period and the end of the non-compete.

Next step

Tell us who will be appointed, in what role and through which entity, and send the articles if you have them. We will propose a scope. If the manager will also hold shares, see our work on shareholders' agreements, and for a new company, incorporation.

Schedule a meeting or contact us.