"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:
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:
"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
"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
"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
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