Directors' Service Contracts



Law-Answers.com has a very helpful Business Employment Help Desk page, covering the following topics:

Introduction to Employment Law, Employer’s must do list,  Apprenticeships, Claims arising from Employment, Discrimination, Discrimination on the grounds of: Race, Sex, Dismissal; Employment Contracts, Flexible Working, Pay, Problems at work, Holiday Entitlement, Pay Deductions, Recruiting & Hiring,Redundancy, Right to work in the UK, Sexual Harassment at work, Sickness at work, Termination of employment, Time off work, The Minimum Wage, Whistleblowing, Zero Hours Contracts, Disciplinary & Grievance Procedures- ACAS

There are also useful articles on employment on our Employment Overview page.

"An executive director used to have a “Service Agreement”. Today a company is under a statutory obligation to provide written terms of employment, just as it is to any other employee, and even if the director is the sole owner of the company.

A non-executive director is not an employee of the organisation, and therefore requires a contract that preserves his or her self-employed status and clarifies that the work he or she performs is in the nature of consultancy rather than executive employment.

Accordingly, the greatest differences between our directors’ service contracts relate not to what position the director holds, or what he or she does, but to his or her contractual relationship with the company.

All these agreements are therefore suitable:

  • for use by any type of organisation: company, charity, trust, partnership, governmental organisation or other
  • for use with directors holding any position within the organisation
  • for permanent and fixed terms of appointment. 

In addition to the terms that by law are required to be included, a service contract sets out many other matters in the employment relationship and Net Lawman is clear that these documents:

  • are up to date with current applicable employment law
  • follow current best practice disciplinary procedures recommended by ACAS and other bodies
  • help protect the company from claims both in an Industrial Tribunal and in court as a result of a common law dispute
  • protect the director from unreasonable demands by other directors and shareholders
  • set out remuneration and benefits
  • cover what happens at termination, and in case of redundancy
  • include strong protection for the organisation’s intellectual property
  • minimise the administrative burden of legal compliance"  Netlawman.co.uk

Template: Director's Service Agreement (employment contract) (complete online option available)*

"Today a company is under a statutory obligation to provide written terms of employment to a director, as to any other employee.

It is advantageous to both sides to set down the package in an employment contract (for directors, traditionally known as a service agreement), rather than in just a few words from the company.

This contract is a complete legal and practical framework for the employment of any executive director, whether on a running or fixed term. It also defines the relationship between the director and the organisation. Provision for remuneration and common benefits befitting a director is included, as is strong protection of company information." Netlawman.co.uk


Template: Non-executive Director's Service Agreement

"This is a contract for services for a self-employed, part-time director. It makes clear that there is no contract of employment. It can be used for a fixed term or a running contract for a company director, or director-level equivalent in a charity or other organisation. It provides particularly strong protection of company information.

This is a service agreement that sets out the contract for services between a non-executive director  and a company or other organisation.

It should be used by any company or other organisation with a corporate structure that requires a contract with an independent non-exec director who will provide advice, balance and support.

Being non-executive, the director is not an employee of the organisation. To preserve self-employed status it is important that the service contract, as this one does, clarifies that his or her work is in the nature of consultancy rather than executive employment. For example, the director may be required to attend meetings and “bring independent judgement to bear on relevant issues”. Netlawman.co.uk


Template: Unpaid non-executive Director's Service Agreement

"This is a contract for services for an unpaid, part-time director. It makes clear that there is no contract of employment. It can be used for a fixed term or a running contract for a company director, or director-level equivalent in a charity or other organisation. It provides particularly strong protection of company information." Netlawman.co.uk


Detailed guidance notes are provided with each template. Net Lawman offers a money back guarantee if the document is not what you need, as well as a legal review option if you want some professional assistance when you are drawing up your documents.

Notice: Please note that the information provided on this page:

  • Does not provide a complete or authoritative statement of the law;
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  • Does not create a contractual relationship;
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The documents menus are designed to describe the documents, but please be sure that you check them over carefully to ensure that they do meet your needs. All documents are subject to Net Lawman's Terms and Conditions, which we ask you to read before you purchase any documents.

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APOD exists to:

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