B2B contract is an increasingly popular form of cooperation lately. It can bring many benefits to both parties. See exactly what it entails before you decide to go for it.
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What Is a B2B Contract?
A B2B contract is an agreement between two entrepreneurs (business-to-business). The parties involved can be sole proprietors and commercial companies, such as LLCs.
Under a B2B contract, one party agrees to provide specified services to the other in exchange for an agreed fee. Any range of services can be the subject of such a contract.
A self-employment contract is:
- An unnamed contract
- Concluded under the principle of freedom of contract
It is not directly regulated in the Civil Code. Therefore, in matters not regulated, general provisions apply.
What Should a B2B Contract Include?
The nature of the B2B contract allows the parties to shape it freely. However, it is worth including provisions that will properly shape this contractual relationship. The most important aspects are:
| Precise definition of the subject of the contract | so that the scope of services does not raise any doubts and is clear to the parties |
| Identification details of both parties | e.g. names, business names, tax identification numbers, registration numbers (KRS), and addresses |
| The location where the contract will be carried out and its duration | It can be defined by the parties freely. |
| The remuneration and payment terms | You can specify any additional benefits for the service provider, e.g. bonuses or commissions, and the conditions for granting them. |
| Copyrights (transfer of rights or granting licenses) | The scope and timing of the transfer of rights should be clearly indicated. |
| Non-competition clause | It should define the scope and duration of the prohibition. It can also include conditions regarding the confidentiality of data related to the services provided. |
| Method of recording the service performance time | It must specify how the service provider will be compensated for the services rendered to the other party. |
| Termination conditions, | Date, form (written, e-mail, etc.); possible penalties for breach of contract or its termination |
| The competent court for resolving disputes | This could be, for example, the court with jurisdiction over the place of residence of the party ordering the service. |
Is it Worth Switching to a B2B Contract?
A self-employment contract is beneficial for employers. This is supported by the economic value, i.e. the reduction of the employer’s costs. People who decide on this form of cooperation can also gain a lot. However, their situation will be different from that of an employee.
That is why we have prepared a list of the advantages and disadvantages of a B2B contract:
| ADVANTAGES | DISADVANTAGES |
| Higher salary – thanks to the fact that the employer does not bear the costs of employment | The need to independently settle profits from the business. This involves issuing invoices and paying contributions to the Social Insurance Institution and the Tax Office. |
| Low initial costs of running a business. E.g. preferential social insurance contribution for entrepreneurs | Lack of employee rights, like those from an employment contract |
| Flexibility of work – the self-employed person organizes their duties on their own | A wide range of responsibilities for the services provided |
| Ability to deduct business expenses, such as fuel | lack of employee benefits, e.g. subsidies for corrective glasses |
| The right to choose the form of taxation, e.g. lump sum on recorded income | |
| Opportunity to systematically increase income by providing services to multiple clients | |
| Lack of professional dependency resulting from the employment contract |
B2B Contract vs. Employment Contract
A B2B contract is an agreement under which both parties have equal rights. The size of the company does not matter. In terms of rights and obligations, self-employment differs significantly from an employment contract. Here is a comparison of the key differences:
| B2B contract | Employment contract |
| Self-employment | Employment dependence |
| No employee benefits | Employee benefits package, such as vacation leave, social benefits |
| Business costs are borne by the entrepreneur | Employment costs are borne by the employer |
| Basic legal act – Civil Code | Basic legal act – the Labour Code |
| A self-employed person must take care of their own company | The employee is protected by labour law |
B2B Contract – Summary
A B2B contract gives you a chance to become self-employed. Running your own business requires diligence and awareness. Therefore, it’s important to carefully weigh the pros and cons of this type of arrangement. This will help foster a positive image in the eyes of clients and secure future benefits.
Do you need support in analyzing or creating a B2B contract? Our experts will answer all your questions – feel free to contact us!
FAQ – Questions and Answers
What is a B2B contract?
A B2B contract (business-to-business) is a contract concluded between two entrepreneurs. It regulates the rules of cooperation, the scope of services and remuneration. This is a popular form of cooperation in the self-employment model.
What are the key elements of a B2B contract?
The key elements of a B2B contract include:
data of the parties to the contract,
description of the services provided,
deadlines, remuneration, payment terms,
provisions on liability and termination of the contract.
Do I need a lawyer to draft a B2B contract?
Although it is not mandatory, it can be beneficial to seek the help of a lawyer. Especially if you have no experience in creating such documents. A lawyer will help ensure that the contract complies with applicable law and protects your interests.
What are the advantages of a B2B contract for the self-employed?
A B2B contract offers many benefits. For example flexibility in setting the terms of cooperation and the possibility to negotiate salary. It also offers greater control over one’s own working time. In addition, it allows you to build long-term relationships with customers.
What are the most common mistakes when concluding a B2B contract?
Common mistakes include vague service descriptions, lack of provisions regarding payment deadlines, and unclear terms of liability for potential damages. It’s essential to carefully think through every point of the contract before signing.
How can I terminate a B2B contract?
A B2B contract can be terminated according to the terms outlined in the agreement. This usually requires a written notice with a specific notice period. It’s also important to include reasons for termination and procedures for ending the cooperation in the contract.
Can I change the terms of a B2B contract after signing it?
Yes, the terms can be changed by mutual agreement between the parties. Any changes should be documented in writing and signed by both parties. This will help you avoid future misunderstandings.
What are the tax obligations related to a B2B contract?
Self-employed people must remember about tax obligations related to running a business. They must submit VAT or PIT declarations and pay social and health insurance contributions. It is also important to document all revenues and expenses related to the business.