Letter to Members re Director’s Proposed Long Term Service Contract (s.188)

This is a template letter to members informing them that the company proposes to enter into a long-term service agreement with a director.

Shareholder approval required for certain long-term directors’ service contracts (s.188)

Under section 188 of the Companies Act 2006, directors’ service contracts with a guaranteed term which is (or maybe) longer than 2 years must be approved by an ordinary resolution of the shareholders of the company.

Memorandum must be made available to members (s.188(5))

A resolution under section 188 must not be passed unless a memorandum setting out the proposed contract incorporating the term is made available to members (s.188(5)).

Use this cover letter when circulating the resolution and memorandum

This cover letter should be sent to members enclosing the proposed (written) resolution to approve such term, as well as the memorandum.

Letter to Members re Director’s Proposed Long Term Service Contract (s.188) is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.