Collaboration models beyond false self-employment

Nature is our role model...


… because it is fascinating how it continually develops procedures, processes, systems and strategies. We can already find interesting models of nature, which show how to work "hand in hand" together, on our doorstep. Everyone knows mushrooms, but their purpose and use for trees is not nearly as well known. In our latitudes, about 1/3 of the large mushrooms belong to the mycorrhizal fungi (from the Greek: mushroom = mukês and root = rhiza). What does that mean? Similar to an organ, the mycorrhiza exchanges substances between (mycorrhizal) fungus and tree. The fungus transfers nutrients from the soil in exchange for sugar from the photosynthesis (of the tree). In particular, mushrooms care about a clean cooperation and keep dissolved (poisonous) heavy metals in the soil, which would otherwise be absorbed by the tree. In addition, the cooperation with mushrooms has reduced the susceptibility of the tree to frost; the fungus - not unlike an immune system - strengthens the resistance against pathogens and promotes growth. ChallengeIT is also committed to a "clean" and "orderly" collaboration with clients, without them having to get "cold feet" because of the collaboration model. Below we show you the possibilities of cooperation models with ChallengeIT. Of course, we also offer you advice on how to change and adapt your services in such a way that you too can use your services "cleanly", "properly" and according to applicable law in the future.

In addition to content-related and financial aspects, existing cooperation models are increasingly coming into focus. This time, the emphasis is particularly on the actual realization of the cooperation and not only on the contractual depiction of the same. In order to be able to concentrate on your core competence in the future, especially in cooperation with external experts or freelancers, we have – due to recent events - thought about the framework conditions for cooperation.

Everyday professional life

In everyday life, self-employed people have to deal very closely with an order or an assignment and a directive or instruction. Even the smaller, exclusive car manufacturers rely on IT components to plan parts or to order them - IT is an indispensable part of life.

The directive basically corresponds to an arrangement which expects the execution of a (named) "task". In labor law, a directive is understood as "exercising the right to act" (of the employer), which specifies the duties (of the employee).

An order is basically a request to perform a specific action. It is irrelevant whether it is a transaction with or without tangible result. Typical of an order is that it is fulfilled or not. In the positive case there is a result, in the negative case none. Also typical is the feedback from the performer. In the positive case, the client at least takes note of or accepts the result. According to the law, an order is a promissory contract through which the contractor commits himself to manage a business transaction assigned to him by the client. 

ChallengeIT considers the following types of contract to be potentially suitable for offering services:

A service contract (§ 611 ff. BGB) is present if one party has committed itself to the performance of certain services and the other party to the payment of the agreed remuneration. This type of contract is particularly suitable for settling services according to incurred expenses.

A work contract (§§ 631 ff. BGB) stipulates the mutual exchange of services to which a contractual partner (entrepreneur) is committed to manufacture a work against payment of a remuneration (work wage) by the other contracting party (purchaser). This contract type is suitable for settling defined service packages comprising service and products or individual self-contained services (service or product) after their completion.

An agency contract is a service or work contract (§ 611 and § 631 BGB) through which the debtor is obliged to provide a business transaction transferred to him by the service creditor (§ 675 (1) BGB). 

A work delivery contract (§ 651 BGB) includes not only the work performance but also the obligation of the entrepreneur to procure the material (= the material for the work) himself.

Thinking about solutions has been particularly difficult - yet we've been proactively shattering our head to differentiate service for you. Please continue reading here.

False self-employment

"False self-employment is present when an employed person acts as an independent entrepreneur, although he is an employee by nature of his activity. An employment relationship is disguised and declared to be the activity of an independent contractor in order to avoid taxes, restrictions and formalities involved by employment, social security and tax law. This is particularly relevant for freelancers and subcontractors. A false self-employment comes along with social security and tax obligations that are not met. This represents illicit work according to § 1 Abs. 2 SchwarzArbG. “



The German pension insurance ( lists in a public catalog – excerpt reproduced below for two occupational groups - information on occupational groups that determine self-employment or dependent employment.

Liberal professions: Just belonging to the liberal professions is not enough to recognize self-employment among this group of persons. The decisive factor is the overall assessment where it is necessary to check whether the individual is integrated into the company of the client and thus is an employee. 

Freelance employees: The term "freelance employee" does not yet say anything about the social security assessment and does not constitute a criterion to assume a self-employed activity. The assessment must be made considering the overall context.


But how can you differentiate between self-employment and employment?

In practice this remains difficult. A "real" self-employment probably exists when freelancers bear the entrepreneurial risk themselves. The Social Security Code (SGB §7) mentions important indications for self-employment. In summary: If you have your own business premises (for example, with your own company sign, separate entrance, bell, etc.) and an appropriate external appearance (for example, with letterheads, business cards, homepage, etc.), you can potentially be classified as a self-employed person. If you also use advertising, actively seek new customers and orders (for example, via the Internet, mailings, social media, networks, vendor databases, customer loyalty programs, referral marketing), create your own offers and make appointments, the chances of being perceived as such increase. In addition, it is an indication of self-employment if the necessary equipment was purchased and financed by oneself. This concerns e.g. car, PC, laptop, special software etc. The self-employed do their work not only with one but with several customers and do not necessarily complete the incoming orders on their own. If this is the case, the work will be done independently and within the framework of the concluded agreements (contract). Also, economic risk due to defects is under personal responsibility or, if necessary, covered by professional indemnity insurance. The self-employed receive their payment for performance and not for attendance. They calculate the prices for their services themselves and determine payment terms and rebates on their own.

The self-employed do not wear work clothes provided by the client, do not record their working hours in the client's system and are also not bound by any breaks or working time arrangements. The place of work is determined by oneself.
A sign for self-employment is also the membership in a professional association and the fact that at least one employee is subject to social insurance.

Accordingly, not independent is who, within defined working hours, follows the orders of the employer, is obliged to produce regular reports, works in the premises of the employer who determines where the work should be carried out. In addition, specifications regarding equipment and technologies to be used by the client are critical. Particular attention must be given in this context to the actual circumstances. Not the contractual agreement, but the professional life is to be evaluated.