Directors do not have to be employees of a company. Whether a director is an employee or not depends entirely on the nature of a director’s relationship with a company. A service agreement helps clarify key issues for all interested parties, including directors' responsibilities, as well as pay and benefits.
Whether or not a director is an employee, a service contract has benefits for both companies and directors. If a director is an employee, it is important that employment law, as well as company law, is complied with. A professionally drafted service contract will ensure that all applicable law is complied with. Amongst other things, a service contract should:
- Deal with work hours and place of work
- Deal with bonus or other reward scheme
- State whether the director is an executive or non-executive director
- State a director’s salary
- Deal with confidentiality and intellectual property
- Deal with resignation and termination – including garden leave clause and restrictive covenants
- Cover directors’ duties
- Sickness
Contact Julie Temple
Whatever your requirements, we are always happy to offer a free initial telephone consultation to discuss your particular query or concern, and how we can help you.
