Being an active partner: Beware of the traps! What you need to know before you accept

This is the story of Abdel, Sonia and Marco. They were offered "jobs" as a deliveryman, a saleswoman and a bricklayer. But not as an employee. Instead, they were offered the chance to become active partners in the company. Certain arguments are often used to convince people this is a good idea: They'll have a bigger "salary", they'll have shares in the company, and sometimes even the chance, for people on unemployment benefits, of maintaining these benefits while working. On paper, the proposal may seem very tempting. In practice, however, it does have consequences. 
Faced with a growing number of testimonials, we've written this article to analyse the issue and help you understand what the status of active partner actually covers, identify risky proposals and avoid abusive situations.

What is an active partner?

An active partner is a person who holds one or more shares in a company in their own name AND who carries out an activity within the company. This activity may include: 

• Day-to-day management of the company; 
• Exercising a commercial function; 
•  Providing services to customers on behalf of the company.

An active partner is not a salaried employee, but a self-employed worker. They are therefore subject to the social status of self-employed professionals.  What does self-employed status entail?

What does self-employed status entail?

By becoming an active partner, you adopt the social status of a self-employed professional, with all the associated obligations. Practically, this means that: 

• You have to register with a social insurance fund for self-employed workers;
•  You have to pay self-employment social security contributions every quarter; 
• You have to declare your annual income yourself, on which you will later be subject to personal income tax; 
• Depending on the nature of your business, you must file VAT returns.

In other words, you are responsible for filing your annual income tax return (usually with the help of an accountant). Taxes and social security contributions are then calculated based on this tax return. So it's important to put aside enough money to pay for them. These amounts are never paid by the company you work for, but must be paid by you as the self-employed worker.

Furthermore, self-employed status does not give you access to the social protection provided with salaried employee status. In particular, this means no paid holidays, no notice period or compensation in the event the employment relationship is terminated, no guaranteed monthly income, no guaranteed salary from the first day of illness, etc.

In this type of situation, the consequences of self-employed status can be particularly severe.

Active partner = false self-employment?

As already mentioned, active partners have de facto self-employed status. A self-employed worker is a person who carries out a profit-making professional activity that does not bind them to an employer with an employment contract.

This means that there can be no subordinate relationship, either between the customer and the self-employed person, or between the partners. If such a subordinate relationship is discovered, the self-employed worker will be qualified as exercising false self-employment. In Belgium, working as a false self-employed person is a social fraud that can lead to penalties.

To determine whether a person qualifies as a false self-employed worker, Belgian law has established four criteria: 

• The will of the parties to cooperate on an independent basis;
• The freedom to choose your working hours; 
• The freedom to organise your work; 
• The absence of hierarchical control.

In practical terms, if you were not given a choice in accepting this status, if you work fixed hours within an imposed framework, if you cannot freely choose your holiday days, if you have to justify your absences due to illness or if you carry out your tasks under hierarchical control, you will be qualified as a false self-employed person in the event of an inspection.

If you're unemployed, can you keep your benefits while you're an active partner?

In Belgium, the Springboard benefit means you can combine a self-employed activity on a secondary basis with the status of a job seeker receiving benefits.

However, this benefit is strictly limited, both in time and in the amount of income permitted. It can be granted for a maximum of 12 months, and is subject to a certain income ceiling.

In theory, therefore, it is possible to work as an active partner while receiving unemployment benefits thanks to the Springboard benefit. In practice, however, this situation rarely applies: a person working full-time will generally exceed the income ceiling and will then have to repay the benefits received over the 12 months.

It is also important to know that the Springboard benefit does not extend the time for which you are entitled to unemployment benefits. If a person is excluded from unemployment, they will stop receiving their benefits, even if they are granted the Springboard benefit.

👉 So, don't believe companies that suggest that, by becoming an active partner, you can extend your unemployment benefits.

Conclusion

If you're offered the chance to work as an active partner, it's essential that you find out everything you need to know beforehand. The legal, tax and social implications of this status can have particularly far-reaching consequences.

If you have any questions about an offer and/or your situation, feel free to contact our advisors on 1819.