THE BOTTOM LINE
- Ambiguity is expensive: Informal business collaborations, even those with profit-sharing arrangements, risk being legally defined as formal partnerships, leading to costly disputes over asset division upon termination.
- Equality is the key test: Dutch courts will look past friendly communications and focus on the operational reality. A true partnership requires “affectio societatis“—the intent to collaborate on an equal footing, which was found to be absent in this case.
- Structure dictates status: Structuring payments via invoices (especially with VAT), maintaining separate legal entities, and retaining clear lines of authority and financial control are powerful indicators of a contractor relationship, not a partnership.
THE DETAILS
This case involved a collaboration between an experienced, licensed real estate agent and a friend who was a newcomer to the industry. Together, they launched a new brand targeting the high-end property market. The arrangement was informal but included profit sharing. When the experienced agent terminated the relationship, her collaborator sued, claiming a formal partnership (maatschap) existed and demanding an equal share of the business assets. The initial court agreed, creating significant risk for the established business owner. However, the Court of Appeal has now overturned that reasoning, providing crucial clarity for businesses engaging in flexible work arrangements.
The Court of Appeal’s decision hinged on the absence of a core partnership element: collaboration on a basis of equality. While the parties’ communications were friendly and suggested a joint effort, the court looked at the facts on the ground. It found a significant imbalance in professional standing, risk, and authority. The established agent was licensed, bore all entrepreneurial and liability risks, and was the only one authorized to sign contracts. Her collaborator was unlicensed, required an official exemption to work, and operated under the agent’s direct supervision and responsibility. This fundamental inequality in their roles and capabilities meant they were not operating as partners on an equal footing.
The final nail in the coffin for the partnership claim came from the administrative and financial structure of the collaboration. The junior collaborator had set up her own sole proprietorship and regularly invoiced the senior agent’s firm for her share of the earnings, crucially adding VAT to these invoices. The Court of Appeal noted that partners in a maatschap share profits; they do not invoice each other for services as a contractor would. This, combined with the fact that she had no access to the business bank accounts, no key to the office, and no role in management decisions, made it clear that the relationship was one of a principal and a self-employed contractor (ZZP’er), not a partnership of equals.
SOURCE
Source: Gerechtshof Arnhem-Leeuwarden
