Freelance web agency? Possibility of founding a partnership.
January 11, 2013 | 35,00 EUR | answered by Wirtschaftsprüfer André Hintz
Dear expert,
At the moment, I am planning to start a web agency with two colleagues. We would like to work on a freelance basis, possibly as a partnership. Unfortunately, there are a lot of conflicting statements on the internet regarding recognition as a freelancer.
I myself have a diploma in Business Informatics, and my two colleagues are Information Technology Assistants. Our work revolves around complex online shop projects, which require extensive preliminary discussions and workshops for the development of detailed specifications and requirements documents. Design tasks and their implementation need to be completed, as well as some photography and graphic editing. Additionally, professional software development, including various phases from planning to testing, project management, etc., is also part of our work. Lastly, training sessions may also be included in our scope of work.
I have come across several references stating that "web designers" are classified as artists and therefore considered freelancers, but there are just as many that view them as tradespeople. The same essentially applies to software developers, with the mention of a relevant degree, which only I possess.
Could you, based on the description of our activities, provide an assessment on whether a freelance classification is possible? Regarding the establishment of a partnership, would a specific distribution of tasks be advisable, or could this potentially enable freelance status? For example, could I, as a Business Informatics graduate, be assigned to software development tasks similar to an engineer, while the two colleagues focus more on design tasks?
Thank you in advance for addressing my question.
Dear inquirer,
I would like to answer your question within the scope of an initial consultation and based on your fee commitment, along with the rules of the online portal. My response pertains to the situation you have presented.
As a graduate in Business Informatics, you can work as a freelancer as long as your work in software development is similar to that of an engineer. This means you are responsible for the planning, construction, and monitoring of the software, and your education is comparable to that of an engineer (a diploma should be sufficient). Recognizing your work as a freelancer should not pose any problems.
I find it more challenging to recognize your colleagues who are Information Technology Assistants as freelancers, as there may not be a comparable engineering education. However, there have been cases where web designers have been recognized indisputably as freelancers in the context of artistic work. Nevertheless, a self-taught education as a web designer is not sufficient. Overall, while the tax office may follow the arguments to recognize you as a freelancer, it is not obligated to do so. For certainty, a binding ruling should be obtained from the tax office.
Until it is certain that your colleagues will be classified as freelancers, you cannot legally establish a partnership company. If you still establish a partnership company and your colleagues are not recognized as freelancers, you will automatically be operating as a commercial partnership.
To avoid this, you could start as a freelancer yourself and hire your colleagues as technical employees, possibly with a profit-dependent income component. At the same time, you can obtain a binding ruling from the tax office and establish the partnership company after receiving a positive decision.
I am available via email for any further questions and assistance.
I hope my explanations have been helpful to you, and remain
Kind regards,
André Hintz
Tax consultant
Steuerberatung@andrehintz.de
