Directors' Services Agreement
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Do you need a Directors' Service Agreement?
Directors’ services agreements are analogous to employment contracts: they set out directors’ roles, responsibilities and obligations, both statutory and company-specific.
Directors’ service agreements are essential because they regulate the Company’s relationship with the directors that have day to day responsibility and control. Even if a firm has no employees, it should still have directors’ services agreements in place for the protection of all parties.
What might a Director's Service Agreement cover?
Directors’ service agreements typically cover three main areas:
Contractual Arrangements For Directors
Contractual arrangements for directors typically include their job title, salary, pension, benefits and hours they must work.
Director’s service agreements should also cover the director’s unique roles and powers. For instance, directors may have the ability to enter into contracts with other firms, employees, and contractors. Documents can include limits on directors’ power, too.
Duties The Director Must Perform
Under the Companies Act 2006, directors have certain duties towards the companies they form. These are known as “fiduciary duties”. Directors’ service contracts should refer to these duties, a breach of which may amount to grounds for dismissal.
The legislation says that directors must:
Why Do Businesses Require Director’s Service Agreements?
Directors’ service agreements are essential for several reasons:
Get Assistance Drafting Directors’ Service Agreements
Our team of experienced lawyers can assist in all parts of directors’ service agreement preparation.
Our team ensures that documents serve your business interests and cover all legal and operational requirements.