Directors' Service Contracts
Directors Service Contracts are designed for companies seeking to employ directors. They are intended for situations where a director is also employed by the company in an executive role and needs an employment contract setting out the terms of that employment.
When does a director need an employment contract?
Officially, a director is an officer of the company and not an employee. As such, they have no right of remuneration unless the company’s articles state otherwise, and in theory may not need an employment contract or agreement.
However, a director may also be employed in another capacity, for example as a finance director or managing director. In that case, they will be an executive director and will require an employment contract.
Director’s service contract options
The Director’s Service Contract – Fixed Salary is the standard option where the director’s remuneration is based on a fixed salary.
The Director's Service Contract - Including Bonus & Share Option Arrangements is designed for a director whose remuneration package includes bonus and share option arrangements.
Director offer letters and service contract consistency
An employment offer letter is usually issued before or alongside the service contract, so the offer, executive role, remuneration arrangements and contractual terms are consistent from the outset. The matching Directors' Service Contracts Employment Offer Letters can be used when making an offer to an executive director.
Employment Rights Act update
These directors’ employment contracts have been drafted and kept up to date by employment solicitors and HR professionals. The contracts have been updated to reflect the statutory sick pay changes set by the Employment Rights Act, under which SSP is now payable from the first full day of sickness absence.
Companies Act 2006 compliance
These Directors Service Employment Contracts are compliant with the Companies Act 2006.
These Directors Service Contracts are also available in the Corporate Document Collection in the Directors' Service Contracts.
- Director’s Service Contract – Fixed Salary
- Director's Service Contract - Including Bonus & Share Option Arrangements
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