Managing commercial agents: whoever starts giving orders no longer has one

The short answer

You do not manage a commercial agent (Handelsvertreter) through instructions, but through information, territory and contract. That is not a leadership philosophy, it is the consequence of § 84(1) sentence 2 HGB: self-employed is whoever can essentially organise his activity freely and determine his working hours. Anyone who takes that freedom back in daily practice — attendance duty, route plan, holiday approval — is no longer leading a partner, but an employee nobody has registered.

The line is not drawn in the contract, it is drawn on Monday morning

I have seen both: sales organisations that treat their partners like strangers, and ones that treat them like staff. Only the second is additionally risky. § 7(1) sentence 2 SGB IV names two indicators of employment: an activity performed according to instructions, and integration into the work organisation of the party giving them. Neither arises from a clause, but from lived practice. And § 84(2) HGB draws the conclusion: anyone permanently entrusted with brokering business without being self-employed counts as an employee.

Form of management	Classification
Product training, price framework, quality standards, targets set on results	contract term, uncritical
Reporting duty on brokered transactions	a duty in any case, § 86(2) HGB
Fixed office attendance, weekly plan, route specification, holiday approval	instruction, indicator under § 7(1) SGB IV
Obligation to use company systems, company email address, in-house business card design	uncritical on its own, integration in the aggregate

Anyone unsure does not guess, but asks: § 7a(1) SGB IV allows the parties to apply to the Deutsche Rentenversicherung Bund for a decision on employment status; the decision is taken under subsection 2 on the basis of an overall assessment of all the circumstances of the individual case, and under subsection 4a on application even before the activity starts. Rarely considered: under § 5(3) ArbGG, commercial agents count as employees within the meaning of that act if they are single-firm agents (§ 92a HGB) and most recently received on average no more than 1,000 euros per month — in which case the dispute goes to the labour court.

The management tool the law forces on you

The most interesting provision in commercial agency law for a sales director is § 86a HGB, because it demands precisely what is the best form of management anyway. The principal has to provide the necessary documents — samples, drawings, price lists, advertising material, terms and conditions — and to give the necessary information, in particular to notify without undue delay the acceptance or rejection of a brokered transaction and its non-performance. And he has to inform the agent without undue delay if he is likely to be able or willing to conclude business only to a considerably smaller extent than the agent could expect under normal circumstances. Diverging agreements are void under subsection 3.

In daily practice: supply shortage, price increase, product discontinuation, a withdrawn approval — that belongs with the partner before he hears it from the customer. The other direction is in § 86(2) HGB, equally non-waivable: notification of every brokered and every concluded transaction, without undue delay.

That produces a rhythm which works without instructions, because both sides owe it:

1. Weekly, five minutes in writing: new introductions, open quotations, status from the company (accepted / rejected / not performable).
2. Monthly, 45 minutes in conversation: portfolio, losses, product changes, bottlenecks over the next 60 days.
3. Quarterly: territory, target groups, terms — everything that is contract and is therefore negotiated rather than ordered.

The same cadence as in the pipeline review, with one difference in language: you ask about the result, not about the diary. “How many of your seven open quotations have an appointment in the next four weeks?” is management. “When are you out on the road this week?” is not — it documents a relationship of instruction.

A territory is a promise with a price tag

Assigning a territory or customer group is the strongest management tool that does not rely on instructions: it allocates responsibility without dictating time — and it is more expensive than most contracts let on. Under § 87(2) sentence 1 HGB, where a territory has been assigned, the agent is entitled to commission also for transactions concluded during the contractual relationship with persons in his territory without his involvement. Online shop, inbound call, the tender that lands directly with the company: all of it commissionable. That is no argument against territories, but an argument for cutting them deliberately and defining in writing which channels are excluded — before the first direct order arrives.

What the ending costs

The point at which partner contracts regularly become expensive is their end. Three provisions belong together:

Notice. § 89(1) HGB: one month in the first year, two in the second, three in the third to fifth, six months after five years, in each case to the end of a calendar month unless otherwise agreed. Extending is possible, but the period for the principal may not be shorter than that for the agent (subsection 2).

Compensation. § 89b(1) HGB grants reasonable compensation where the principal continues to derive substantial benefits after the end of the contract from business relations with new customers acquired by the agent, and where payment is equitable. The maximum is in subsection 2: one annual commission based on the average of the last five years. Under subsection 3 the claim is excluded, among other cases, where the agent gives notice himself (without the principal's conduct giving reasonable cause, and absent age or illness) or where the principal had good cause on account of culpable conduct by the agent. Under subsection 4 it cannot be excluded in advance and must be asserted within one year.

A model calculation with freely chosen figures:

Item	Assumption
Partner's commission, five-year average	€60,000 per year
Notice given by the principal after seven years	6 months, to the end of a month
Compensation claim, maximum under § 89b(2) HGB	up to €60,000
12-month restraint of competition, reasonable compensation	in addition, § 90a(1) HGB

Competition afterwards. § 90a(1) HGB requires a post-contractual restraint of competition to be in writing, with a signed document handed over by the principal, limits it to two years at most and to the assigned territory or customer group, and obliges the principal to pay reasonable compensation. He may waive the restraint in writing up to the end of the contract, but is released from the compensation only six months after that declaration (subsection 2).

Anyone who knows these three figures leads differently. A partner whose compensation claim reaches a full annual commission is not flexible sales capacity — he holds a stake in your own customer base. A good model if you plan it that way; a bad one if you believe you have bought in a service provider.

Action list

1. Check what is actually being ordered day to day: attendance, routes, holidays, system obligations. Drop every order, or clarify the status honestly.
2. In case of doubt, start a procedure under § 7a SGB IV, under subsection 4a even before the activity begins.
3. Organise the duties from § 86a HGB as a fixed information rhythm — acceptance, rejection, non-performance, drop in volume, each without undue delay and documented.
4. Settle in the contract whether a territory is assigned and which channels are to be excluded from § 87(2) HGB.
5. Reflect the notice periods of § 89 HGB and check that the period for the company is not shorter than the one for the partner.
6. Carry the compensation claim under § 89b HGB forward once a year and treat it as a provisioning item, instead of discovering it when the partner leaves.
7. Post-contractual restraints of competition only in writing, with the document handed over, a clear territorial link and a quantified compensation model — or not at all.