Director Service Agreement Template (UK) – Create Your Professional Contract in Minutes

A comprehensive Director Service Agreement should clearly define:

• Parties and effective date - Director and company details with clear commencement date
• Role and responsibilities - Specific director duties and executive functions
• Remuneration - Salary, bonus eligibility, benefits, and payment terms
• Directors' duties - Reference to Companies Act 2006 statutory duties including duty of care, conflicts, and confidentiality
• Fiduciary obligations - Duty to act in good faith, avoid conflicts, declare interests properly
• Expenses and benefits - Reimbursement policies, pension provisions, health insurance
• Board meeting participation - Attendance obligations and committee responsibilities
• Term and termination - Length of appointment, notice periods, termination provisions
• Restrictive covenants - Non-compete, non-solicitation, and non-dealing clauses
• Intellectual property - Assignment of work created during directorship
• Confidentiality - Protection of company information and trade secrets
• Dispute resolution - Grievance procedures and ACAS Early Conciliation clause

Our agreement is crafted by legal professionals and business professionals and includes all essential clauses for UK compliance.

Legal and Financial Risks:

• Breach of statutory duty: Directors must comply with Companies Act 2006 duties. Without clear written terms, disputes arise over what was agreed regarding conflicts, confidentiality, and responsibilities.
• Employment tribunal claims: Without clear terms on notice periods, termination grounds, and remuneration, directors may claim unfair dismissal or breach of contract with significant compensation awards.
• Fiduciary duty disputes: Ambiguous arrangements lead to conflicts over whether the director acted in the company's best interest, triggering litigation and potential personal liability claims.
• Restrictive covenant enforcement: Without properly documented non-compete and non-solicitation clauses, the company cannot prevent directors from immediately setting up competing businesses.
• Tax and National Insurance issues: Unclear remuneration arrangements risk HMRC reclassification, resulting in backdated tax bills and penalties.
• Shareholder disputes: Missing governance terms lead to conflicts with other shareholders and potential derivative actions.
• IP ownership conflicts: Without written IP assignment clauses, inventions or work created may remain the director's personal property rather than company assets.

Common Director Agreement Disputes:

Disputes over compensation owed, whether notice periods were properly honored, whether restrictive covenants are enforceable, conflict of interest allegations, confidentiality breaches, and ownership of work product. These disputes cost UK companies millions annually in legal fees and settlement payments.

A £10 agreement prevents £10,000+ tribunal claims and protects valuable corporate assets.

Comprehensive Director Protection:

• ✓ Company and director full details
• ✓ Effective date and term of appointment
• ✓ Specific job title and director responsibilities
• ✓ Reporting structure and board obligations
• ✓ Salary and remuneration terms
• ✓ Bonus and performance incentive eligibility
• ✓ Benefits package (pension, insurance, etc.)
• ✓ Expenses and allowances provisions
• ✓ Statutory directors' duties clause (Companies Act 2006)
• ✓ Fiduciary duty obligations
• ✓ Conflict of interest and disclosure procedures
• ✓ Confidentiality and trade secrets protection
• ✓ Intellectual property assignment
• ✓ Notice periods and termination grounds
• ✓ Restrictive covenants (non-compete, non-solicitation)
• ✓ Holiday entitlement and leave provisions
• ✓ Data protection compliance (GDPR)
• ✓ Grievance procedures
• ✓ Disciplinary procedures
• ✓ ACAS Early Conciliation clause
• ✓ Severance and garden leave provisions
• ✓ Changes of control provisions

Professional, legally compliant, and ready to use immediately.

Don't Make These Critical Errors:

• No clear fiduciary duties clause: Failing to reference Companies Act 2006 duties leaves enforcement ambiguous and exposes both parties to disputes.
• Vague termination provisions: Without clear notice periods and termination grounds, either party may claim wrongful termination and seek tribunal compensation.
• Missing restrictive covenants: Failing to include enforceable non-compete clauses allows departing directors to immediately set up competing businesses or poach clients.
• No conflict of interest procedures: Without documented disclosure requirements, directors may fail to properly declare interests, triggering statutory breaches and personal liability.
• Weak confidentiality clauses: Generic confidentiality provisions fail to protect trade secrets and sensitive business information that departing directors might use or sell.
• Unclear IP ownership: Failing to assign intellectual property created during directorship means inventions may remain the director's personal property.
• No garden leave provision: Missing garden leave clauses allow directors to work for competitors immediately after notice, exposing confidential information.
• Misclassifying role: Treating directors as employees for all purposes (vs. recognizing their statutory role) creates tax and regulatory compliance issues.
• Missing severance terms: Without clear severance provisions, disputes arise over post-termination payments and benefits.
• No change of control clause: If the company is sold, unclear terms lead to disputes over director retention, exit payments, and bonus eligibility.

Our agreement prevents all these costly mistakes with legally compliant, business-professional terms.