Entrepreneurship meets unemployment: what really applies?

Anyone who runs a sole proprietorship is not insured under unemployment insurance (ALV) and is therefore not entitled to unemployment benefits. Even entrepreneurs with a limited liability company (GmbH) or public limited company (AG) only have limited coverage. Although they pay contributions, if they oversee their own business, for example as a managing director or shareholder, they are not entitled to benefits. Only when they completely relinquish their role, for example through bankruptcy, sale, or deletion from the commercial register, can they receive money from the ALV.

An exception applies to people who have only recently become self-employed. Anyone who started their business less than three years ago and previously paid ALV contributions as an employee for at least one year can still claim unemployment benefits. However, this option ends after four years at the latest.

The ALV also checks whether someone is available for the labor market. If self-employment continues in parallel, for example with customer orders or your own website, this can become a problem. That is why it is often wise to keep a part-time job and only expand your self-employment on the side. Income from this is then considered interim earnings.