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What is a Management Agreement?

A Management Agreement outlines the formal relationship between a company and its independent managers in Belgium. It differs from employment contracts by establishing a self-employed arrangement, letting professionals provide management services while maintaining their autonomy and entrepreneurial status.

Under Belgian company law, these agreements specify essential elements like management duties, compensation structure, non-compete clauses, and termination conditions. Companies often use them to engage directors, CEOs, or other high-level executives while avoiding the social security obligations that come with traditional employment relationships.

When should you use a Management Agreement?

A Management Agreement makes sense when bringing skilled executives into your Belgian company without creating traditional employment relationships. It's particularly valuable for startups and scale-ups looking to attract experienced C-level talent while maintaining flexibility and controlling costs.

Consider using this agreement when engaging directors, interim managers, or consultants who'll take on leadership roles but prefer to operate as independent contractors. It helps navigate Belgian social security requirements while clearly defining responsibilities, compensation, and intellectual property rights - essential protections for both the company and the manager.

What are the different types of Management Agreement?

Who should typically use a Management Agreement?

  • Companies and Organizations: Belgian businesses seeking to engage top-level management without traditional employment relationships
  • Independent Managers: Experienced executives, directors, or consultants who provide leadership services while maintaining their self-employed status
  • Legal Counsel: Corporate lawyers who draft and review Management Agreements to ensure compliance with Belgian company law
  • Board of Directors: Responsible for approving management agreements and overseeing their implementation
  • Tax Advisors: Specialists who ensure the agreement's structure optimizes tax efficiency for both parties

How do you write a Management Agreement?

  • Basic Information: Gather details about the manager's identity, qualifications, and intended role within the company
  • Scope Definition: Define specific management responsibilities, reporting lines, and performance metrics
  • Compensation Structure: Determine fees, payment schedule, and any performance-based bonuses
  • Duration Terms: Decide on contract length, renewal conditions, and notice periods for termination
  • Legal Requirements: Our platform ensures compliance with Belgian company law while generating your Management Agreement, including necessary non-compete and confidentiality clauses
  • Internal Review: Have key stakeholders verify all terms align with company objectives before finalizing

What should be included in a Management Agreement?

  • Party Details: Full legal identities of both company and manager, including registration numbers
  • Service Description: Detailed outline of management duties, authority levels, and performance expectations
  • Independence Clause: Clear statement confirming the self-employed nature of the relationship
  • Compensation Terms: Fee structure, payment schedule, and expense reimbursement policies
  • Confidentiality: Protection of company secrets and intellectual property rights
  • Duration & Termination: Contract period, notice requirements, and grounds for early termination
  • Governing Law: Explicit reference to Belgian law and jurisdiction for dispute resolution
  • Non-Compete: Reasonable restrictions on post-termination activities

What's the difference between a Management Agreement and a Contractor Agreement?

A Management Agreement differs significantly from a Contractor Agreement in several key aspects under Belgian law. While both involve independent service providers, their scope, obligations, and legal implications vary considerably.

  • Authority Level: Management Agreements grant executive decision-making powers and company representation rights, while Contractor Agreements typically limit authority to specific project deliverables
  • Integration Level: Managers become part of the company's leadership structure, whereas contractors remain external service providers
  • Duration and Commitment: Management Agreements usually establish long-term relationships with strategic involvement, while Contractor Agreements often focus on specific, time-bound projects
  • Liability Scope: Managers bear greater fiduciary responsibilities and can be held liable for business decisions, while contractors' liability typically extends only to their delivered work
  • Compensation Structure: Management Agreements often include profit-sharing or performance-based elements, unlike the typically fixed-fee structure of Contractor Agreements

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