At a corporate level, engaging interim managers mustn't be merely an ad hoc solution, but a deliberate strategic decision that minimises legal and financial risks. The disadvantages of individual mandate contracts are significant, as behind the apparent flexibility and financial advantage lies a serious consequence: disguised employment. This can entail severe tax liabilities and penalties. Therefore, it is more advantageous to work with a professional interim service provider that offers guaranteed quality, expert support, and legal security. A dedicated success manager and the diagnostic processes at the project's inception ensure project success, minimising risk and maximising value.

Here are five reasons why you should contract with an interim service provider.

When does interim management come into consideration, and why is it worth contracting with an interim service provider?

As business leaders, we frequently encounter situations in which a critical project requires immediate, practical expertise, or a sudden leadership issue needs to be resolved.

A common scenario occurs when a complex, time-critical project commences, and internal resources are insufficient to complete the task professionally and on time. Another challenging situation arises when a key leadership position becomes unexpectedly vacant, or when priorities prevent someone from addressing a particular problem. The company must urgently replace them to ensure that daily
operations do not suffer and strategic objectives remain achievable.

In such cases, engaging an interim manager can be a salvation, as this experienced professional can quickly integrate into the organisation and begin work within a week. Following a CFO's resignation, for example, not only leadership replacement may be required, but the management of an entire crisis, during which the interim manager not only stabilises the organisation but also implements a new controlling system. The handling of production efficiency problems experienced by automotive suppliers, as well as projects aimed at sustainable results, also requires such leadership. These examples clearly demonstrate the value and importance of interim management.

In practice, however, the question arises: how should the interim manager be engaged? Directly, through an individual mandate contract, or through a professional interim service provider? This decision is not merely administrative but strategic, with significant legal, financial and operational consequences. In what follows, we shall explain in detail why it is worth working with a reliable service provider and why the
pitfalls of independent mandate contracts must be avoided.

What do we call a mandate contract? what is not a mandate contract, and what are the disadvantages of mandate contracts?

The concept and legal classification of mandate contracts

A mandate contract, under the Civil Code (Act V of 2013), means that the mandatary undertakes to perform a specified task, whilst the mandator undertakes to pay a fee. This flexible legal relationship appears ideal for interim cooperation, as it seems quick, simple and easy to manage from an administrative perspective. The reality, however, may differ significantly from this.

A mandate relationship is theoretically based on a "duty of care", meaning the mandatary undertakes to perform the task professionally and carefully. However—and this is both natural and necessary in interim management—mandate contracts contain specific tasks and expected results within a defined timeframe. This is not a problem.

The critical difference lies in WHO the contracting party is and HOW the work is performed. It is therefore essential to understand the distinctions between different types:

• Employment relationship, which presumes hierarchical subordination, fixed working hours and location, and is subject to the strict rules of the Labour Code.
• Contract for services aims at the creation of a specific, measurable result, as opposed to a mandate contract's duty of care.
• Fixed-term employment contract: this is also a form of employment relationship where the legal relationship is time-limited, but labour law rules apply in full.
• B2B service contract: when one company purchases a service from another company. In interim management, this is the safest form for the mandator, as the service provider company bears and manages the reclassification risk, whilst the contract may equally contain specific tasks and result objectives.

The disadvantages of mandate contracts in practice

The content of a mandate contract is flexible, but it is precisely this flexibility that represents the problem. Mandatory elements include the definition of the matter, the method of remuneration and the clarification of obligations. However, suppose in
practice the mandatary performs the work personally and exclusively. In that case, the mandator determines the working hours and location, uses the company's equipment (laptop, company car, telephone number), receives regular, fixed remuneration and integrates into the organisation (email address, business card, organisational chart). The authorities, particularly the National Tax and Customs
Administration (NAV), can easily reclassify it as an employment relationship. This is the danger of a "sham contract", which is one of the most serious disadvantages of individual mandate contracts.

If the NAV establishes that it is, in fact, an employment relationship, several serious consequences must be anticipated:

• Retrospective social security contributions: all unpaid employer contributions must be paid.
• Tax penalty: in basic cases, 50% of the tax shortfall, but in cases of intent, it may be as much as 200%.
• Late payment interest: calculated for each day.
• Legal claims: the former "mandatary" may subsequently claim holiday entitlement, overtime pay and severance pay.

For a 2-year mandate at 2 million forints per month, this can easily reach tens of millions of forints, practically doubling or even tripling the original cost. Moreover, it is not only NAV inspections that pose a danger: in the event of a conflict, the interim professional themselves may initiate the reclassification of the legal relationship.

5 reasons why it is worth contracting with an interim company/service provider

1. Secure background and guaranteed quality
A professional interim service provider, such as Interim Kft., invests considerable resources in selecting, pre-screening and qualifying professionals. Whilst with a direct contract the mandator would need to spend weeks on interviews and checking references, the service provider presents an already proven expert or experts with a track record across multiple projects.

2. The success manager-interim-mandator triangle: guarantee of success
The unique value of working through a service provider is the so-called "triangle methodology". A dedicated success manager maintains continuous contact with both the client and the interim manager, monitors project progress, recognises early warning signs, and mediates or even intervenes when necessary. This three-pole support system ensures that the project not only commences but also concludes
successfully—something absent in direct mandate contracts.

3. Established process: the power of thorough diagnostics
Whilst with a direct mandate, work often begins without a plan or strategy, focusing only on treating symptoms, professional service providers work with an established, structured process. The first step of the cooperation is always a thorough diagnostic phase, which uncovers the real problems, identifies root causes and clarifies objectives. This methodological foundation ensures that the interim manager focuses their time and energy on truly critical areas, avoiding false or superficial problem definitions.

4. Minimised risk: flexibility with security
What happens if the interim professional falls ill unexpectedly? If they do not work out? If it emerges that different competencies are required? With a direct contract, the mandator faces these problems alone, losing valuable time and money. A professional service provider, however, provides immediate replacement in case of illness or any work absence, guarantees the selection of the appropriate professional, and offers free replacement in case of dissatisfaction. They fully assume the legal risks: the client faces no reclassification risk, as they enter into a B2B service contract rather than a direct mandate with a private individual. This avoids the previously detailed disadvantages of mandate contracts.

5. Collective knowledge: vast knowledge base and experience
An interim service provider does not represent a single person but an entire organisation. Behind the interim manager delegated to our client stands a vast knowledge base: proven methodologies, best practices, lessons from previous similar projects, and industry-specific experience. The interim professional can consult with colleagues at any time, retrieve relevant case studies and rely on the organisation's
collective intelligence. A solitary interim working under a direct mandate contract simply does not receive this support. By contrast, working with a service provider offers a tremendous advantage.

Conclusion: the secure choice

The disadvantages of mandate contracts—from potential legal and financial risks to quality uncertainties and the lack of supporting infrastructure—far outweigh any apparent initial savings. Choosing a professional interim service provider is not an additional cost but a deliberate investment: in legal security, guaranteed quality, structured processes and measurable, sustainable success.

With more than two decades of experience, Interim Ltd. offers a unique triangle methodology and insights from several hundred projects. Interim Ltd. guarantees that the client's company receives the most suitable interim manager within transparent, secure legal and financial frameworks, with minimal risk and maximum added value.

If you are seeking a partner that provides not merely a professional but a complete support system through to successful project closure, Interim Ltd. is ready to assist your company in the most critical situations.