| Commentary

19 Directors’ service contracts

| Commentary

19 Directors’ service contracts

Where a director is being offered a service contract for a guaranteed term of more than two years1 as part of the arrangements for implementing a takeover or company reorganisation, the provisions of Section 188 of the Companies Act 2006 must be taken into account. Generally, such a term must be approved by an ordinary resolution of the members of the company or it will be void and the service contract terminable by reasonable notice2.

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