The Companies Act 2006 introduced some significant changes to the law relating to directors’ long term service contracts. The changes included the following:

• Shareholder approval is now required for service contracts in excess of two years (as opposed to five years).
• Shareholders have the right, on payment of a fee, to request a copy of a director’s service contract (or a memorandum of its terms where the contract is not in writing). The copy must be provided within seven days of the company receiving the request.
• A company must keep a copy of all directors’ service contracts (or memoranda of their terms where the contracts are not in writing) at the company’s registered office for a period of at least one year from the date of termination or expiry of the contracts (regardless of the length of the term of the contracts or whether they are terminable within 12 months).

Lupton Fawcett LLP can advise in relation to directors’ service contracts and the provisions of the Companies Act 2006 applicable to them.

Posted: June 25th, 2008 under Corporate Finance.
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