Protect the employment relationship first
A side activity can create employment-law risk if it competes with the employer, uses company resources or affects working hours. Confidentiality and intellectual property clauses are especially important for technology employees.
Obtain written employer approval where needed, and separate customers, devices and accounts. Forming a business does not make the existing employment contract disappear.
Treat tax and insurance separately
Salary remains in payroll records, while business profit is tracked in the business's own books and returns. Whether an annual salary return is required needs a separate check.
Existing 4/a coverage may affect the position under 4/b; verify deductions and status in the individual's SGK records. Add accounting and insurance costs to the formation budget, not just tax.