{"id":6063,"date":"2026-07-30T12:07:28","date_gmt":"2026-07-30T12:07:28","guid":{"rendered":"https:\/\/fasterdraft.com\/?post_type=product&#038;p=6063"},"modified":"2026-07-30T18:23:51","modified_gmt":"2026-07-30T18:23:51","slug":"director-service-agreement-template","status":"publish","type":"product","link":"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template","title":{"rendered":"Director Service Agreement"},"content":{"rendered":"<h2>What is a director service agreement?<\/h2>\n<p>A director service agreement is the contract between the company and the director that sets out the terms on which the director serves as a director of a company, including their role, remuneration, duration, termination rights, and post-termination restrictions.<\/p>\n<p>By virtue of Section 227 of the <a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/2006\/46\/contents\"><em>Companies Act (CA) 2006<\/em><\/a>, a director can be engaged by the company based on a &#8220;service contract&#8221;, which includes the following:<\/p>\n<ul>\n<li>a contract of employment;<\/li>\n<li>a contract for services; and<\/li>\n<li>a letter of appointment as director.<\/li>\n<\/ul>\n<p>This template is specifically designed for the appointment of the company&#8217;s director based on the contract for services. If you are looking to establish employment relations with a director, a separate employment contract template should be used instead.<\/p>\n<h2>Employment Contract vs. Services Contract \u2014 which is right for a UK limited company?<\/h2>\n<p>This is one of the most consequential decisions a company makes when appointing a director. The selected type of document will have different tax implications, rights and duties, and procedures for the termination of relations.<\/p>\n<table>\n<thead>\n<tr>\n<th><strong>Contract of Employment (Contract of Service)<\/strong><\/th>\n<th><strong>Contract for Services<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>The most commonly used type of engagement for executive directors.<\/td>\n<td>Typical for non-executive directors, portfolio directors, or directors acting via a personal service company.<\/td>\n<\/tr>\n<tr>\n<td>Provides statutory employment protection under the <a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/1996\/18\/contents\"><em>Employment Rights Act (ERA) 1996<\/em><\/a>.<\/td>\n<td>Offers flexibility of termination for both parties.<\/td>\n<\/tr>\n<tr>\n<td>Provides statutory protection against unfair dismissal after two years of service (<em>Section 94 of the ERA 1996<\/em>). Starting from 1st January 2027 &#8211; protection applies after 6 months of services.<\/td>\n<td>No statutory protection against unfair dismissal for a director.<\/td>\n<\/tr>\n<tr>\n<td>Offers paid sick leave, annual leave entitlement, employer-paid National Insurance contributions, and other statutory employment benefits.<\/td>\n<td>The contract can be paid or unpaid.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>An <a href=\"https:\/\/fasterdraft.com\/uk\/product\/employment-contract\"><em>employment contract<\/em><\/a> can be a more suitable option when the company is willing to engage a director for the long term and to prevent him\/her from working simultaneously for other companies. On the other hand, a contract for services is more tax efficient for the company as well as preserves the independent contractual status of both parties involved.<\/p>\n<h2>Why does having a professional director service agreement matter?<\/h2>\n<p>A director&#8217;s duties in a UK limited company have two layers:<\/p>\n<ul>\n<li>statutory level &#8211; director&#8217;s duties are defined in <em>Sections 171-177 of the CA 2006<\/em>; and<\/li>\n<li>contractual level \u2013 private clauses dealing with payment, duration, trips abroad, additional incentives and bonuses, etc.<\/li>\n<\/ul>\n<p>A properly drafted agreement should acknowledge both layers of duties. Besides that, having a written agreement is necessary:<\/p>\n<ul>\n<li><em><strong>For due diligence procedure<\/strong><\/em>. If the company goes public, is listed or is being sold, having written contractual arrangements for directors is required under the <a href=\"https:\/\/www.frc.org.uk\/library\/standards-codes-policy\/corporate-governance\/uk-corporate-governance-code\/\"><em>UK Corporate Governance Code (2024)<\/em><\/a>.<\/li>\n<li><em><strong>To avoid disputes<\/strong><\/em>. Once the document is terminated, parties may have a dispute regarding the post-termination rights as well as notice periods.<\/li>\n<li><em><strong>For IP protection<\/strong><\/em>. Disputes over created IP rights in the course of directorship are common where there is no clear wording regarding who owns what in the company.<\/li>\n<li><em><strong>For malus\/clawback clauses<\/strong><\/em>. If a director is acting dishonestly or in breach of fiduciary duty, the company may immediately stop the directorship. However, a written agreement allows imposing a mechanism for reducing or recovering bonuses or incentives paid to the director before (Provisions 37-38 of the <em>UK Corporate Governance Code 2024<\/em>).<\/li>\n<\/ul>\n<h2>Important compliance requirements governing the appointment of the director in a UK limited company<\/h2>\n<p>Depending on the type of company, parties involved in the appointment of a new director under the director service contract should be aware of the following important compliance requirements:<\/p>\n<h3>Exclusion of liability limitation<\/h3>\n<p>Under the CA 2006, the director has a set of default fiduciary duties which cannot be compromised, including the following:<\/p>\n<ul>\n<li>the duty to promote the success of the company (<em>Section 172<\/em>);<\/li>\n<li>the duty to avoid conflicts of interest (<em>Section 175<\/em>);<\/li>\n<li>the duty to declare an interest in a proposed transaction (<em>Section 177<\/em>).<\/li>\n<\/ul>\n<p>Exclusion of liability for the breach of any of these duties in the provisions of this director services contract is void by virtue of Section 232 CA 2006.<\/p>\n<h3>Companies House identity verification<\/h3>\n<p>Starting from 18 November 2025, the newly appointed directors must undergo mandatory identity verification under the <a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/2023\/56\"><em>Economic Crime and Corporate Transparency Act 2023<\/em><\/a>. Failure to undergo such a verification is a ground for refusal of appointment even if the contract is already signed.<\/p>\n<h3>Disqualification of the director<\/h3>\n<p>Under the <a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/1986\/46\/contents\"><em>Company Directors Disqualification Act 1986<\/em><\/a>, the law allows a director to be disqualified from serving as a director of the company for a defined period of time based on the court&#8217;s decision. Before the appointment, the company must check if there is any such ruling regarding the potential candidate.<\/p>\n<h3>Non-compete limitations<\/h3>\n<p>Whether the director provides their services directly or through the professional service company, it is worth checking if there is any ongoing non-compete agreement preventing the director from working for your company.<\/p>\n<h3>Charity Commission Consent<\/h3>\n<p>If the director is being appointed to the registered charity, in such a case, prior consent for the appointment is required from the Charity Commission.<\/p>\n<h3>Board Approval<\/h3>\n<p>Before signing the director services agreement, a separate board resolution appointing the director and approving contract terms is required. Such an approval and its procedure are being defined in the company&#8217;s Articles of Association (a director is usually restricted from voting on their own contract unless the Articles say otherwise).<\/p>\n<h3>Shareholder Approval<\/h3>\n<p>When the duration of the director service agreement is for more than 2 years, in such a case prior shareholder&#8217;s approval is mandatory before the appointment (Section 188 of the CA 2006).<\/p>\n<h2>Which essential clauses should every director service contract include?<\/h2>\n<p>A well-drafted director service contract must cover the following:<\/p>\n<ul>\n<li>full details of the company and director;<\/li>\n<li>appointment details such as start and end date, job title;<\/li>\n<li>termination procedure, including grounds for immediate termination of appointment, and notice period;<\/li>\n<li>If the contract is paid, details of salary, bonuses, incentives,<\/li>\n<li>IP standard waiver clause transferring full rights for created IP to the benefit of the company;<\/li>\n<li>confidentiality clause (supported by an <a href=\"https:\/\/fasterdraft.com\/uk\/product\/general-non-disclosure-agreement\"><em>additional signed non-disclosure agreement<\/em><\/a>);<\/li>\n<li>list of statutory duties under the CA 2006, including conflicts of interest and related-party dealings, fidelity duty;<\/li>\n<li>list of contractual duties;<\/li>\n<li>additional covenants, including prior approval from shareholders, Companies House filing, etc.;<\/li>\n<li>governing law \u2013 usually the law of the jurisdiction where the company is registered (England and Wales, Scotland or Northern Ireland).<\/li>\n<\/ul>\n<h2>Common mistakes to avoid when drafting a director service contract<\/h2>\n<p>By knowing these most common mistakes, you reduce the likelihood of non-compliance with the UK legal framework significantly.<\/p>\n<h3>Mistake 1: Assuming duties are &#8220;created&#8221; by the contract.<\/h3>\n<p>The contract cannot override or contradict the statutory duties of a director defined in <em>Sections 171\u2013177 CA 2006<\/em>. They should exist independently.<\/p>\n<h3>Mistake 2: Leaving director&#8217;s status ambiguous<\/h3>\n<p>The wording of the final document must clearly outline if this is an employment contract or services contract. Vague wording makes unclear the company&#8217;s obligations regarding whether additional employment statutory entitlements under the ERA 1996 should be granted to the director.<\/p>\n<h3>Mistake 3: Forgetting about non-compete limitations<\/h3>\n<p>Once the contract expires, the director most probably will find &#8220;another job&#8221; and, possibly, one with your competitor. To prevent this, it is better to sign a <a href=\"https:\/\/fasterdraft.com\/uk\/product\/non-compete-agreement-for-business-uk\"><em>non-compete agreement for business<\/em><\/a> well in advance, in addition to the present director services agreement.<\/p>\n<h3>Mistake 4: Forgetting about insurance<\/h3>\n<p>A director&#8217;s liability cannot be excluded in full, especially when it comes to the director&#8217;s statutory duties defined in the CA 2006. Therefore, valid professional insurance is always a good solution to protect against risks and liabilities.<\/p>\n<h2>How to use this template for the appointment of a director?<\/h2>\n<p>Follow the instructions below:<\/p>\n<ol>\n<li>Click the &#8220;Create Document&#8221; button to open the questionnaire.<\/li>\n<li>Answer simple questions in the form.<\/li>\n<li>Select a template&#8217;s format \u2013 PDF or Word.<\/li>\n<li>E-sign the document online (for the company&#8217;s representative).<\/li>\n<li>Make a payment.<\/li>\n<li>Download the document template in PDF or Word.<\/li>\n<li>Print it out and check for the correctness of the inserted information.<\/li>\n<li>Seek the board decision to approve the contract.<\/li>\n<li>Make the director and the company&#8217;s representative sign the agreement.<\/li>\n<li>Undergo necessary compliance checks (e.g., Companies House mandatory identification).<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<p><em>This description is provided for general information about the legal framework applicable to director service agreements in the UK. It is not legal advice. Company- or sector-specific circumstances (particularly regulated industries, listed companies, and cross-border appointments) may require bespoke legal review.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is a director service agreement? A director service agreement is the contract between the company and the director that sets out the terms on which the director serves as a director of a company, including their role, remuneration, duration, termination rights, and post-termination restrictions. By virtue of Section 227 of the Companies Act (CA) [&hellip;]<\/p>\n","protected":false},"featured_media":6068,"comment_status":"open","ping_status":"closed","template":"","meta":{"_acf_changed":false},"product_brand":[],"product_cat":[128],"product_tag":[],"class_list":["post-6063","product","type-product","status-publish","has-post-thumbnail","product_cat-business-contract-templates","first","instock","virtual","purchasable","product-type-simple"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Director Service Agreement Template UK \u2013 Compliant with UK Company Law<\/title>\n<meta name=\"description\" content=\"Create a professional UK director service contract in minutes with this customisable template. Easy to edit, legally structured, and ready for instant download.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Director Service Agreement Template UK \u2013 Compliant with UK Company Law\" \/>\n<meta property=\"og:description\" content=\"Create a professional UK director service contract in minutes with this customisable template. Easy to edit, legally structured, and ready for instant download.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template\" \/>\n<meta property=\"og:site_name\" content=\"FasterDraft\" \/>\n<meta property=\"article:modified_time\" content=\"2026-07-30T18:23:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/fasterdraft.com\/wp-content\/uploads\/2026\/07\/Director-service-agreement-template-UK.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1241\" \/>\n\t<meta property=\"og:image:height\" content=\"1754\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/fasterdraft.com\\\/uk\\\/product\\\/director-service-agreement-template\",\"url\":\"https:\\\/\\\/fasterdraft.com\\\/uk\\\/product\\\/director-service-agreement-template\",\"name\":\"Director Service Agreement Template UK \u2013 Compliant with UK Company Law\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/fasterdraft.com\\\/uk#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/fasterdraft.com\\\/uk\\\/product\\\/director-service-agreement-template#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/fasterdraft.com\\\/uk\\\/product\\\/director-service-agreement-template#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/fasterdraft.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/Director-service-agreement-template-UK.jpg\",\"datePublished\":\"2026-07-30T12:07:28+00:00\",\"dateModified\":\"2026-07-30T18:23:51+00:00\",\"description\":\"Create a professional UK director service contract in minutes with this customisable template. Easy to edit, legally structured, and ready for instant download.\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/fasterdraft.com\\\/uk\\\/product\\\/director-service-agreement-template#breadcrumb\"},\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/fasterdraft.com\\\/uk\\\/product\\\/director-service-agreement-template\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\\\/\\\/fasterdraft.com\\\/uk\\\/product\\\/director-service-agreement-template#primaryimage\",\"url\":\"https:\\\/\\\/fasterdraft.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/Director-service-agreement-template-UK.jpg\",\"contentUrl\":\"https:\\\/\\\/fasterdraft.com\\\/wp-content\\\/uploads\\\/2026\\\/07\\\/Director-service-agreement-template-UK.jpg\",\"width\":1241,\"height\":1754,\"caption\":\"UK Director Service Agreement Template \u2013 Editable Word & PDF document for appointing a company director and defining their service terms, duties, remuneration, and termination conditions.\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/fasterdraft.com\\\/uk\\\/product\\\/director-service-agreement-template#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/fasterdraft.com\\\/uk\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"All Legal Templates\",\"item\":\"https:\\\/\\\/fasterdraft.com\\\/uk\\\/legal-templates\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Director Service Agreement\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/fasterdraft.com\\\/uk#website\",\"url\":\"https:\\\/\\\/fasterdraft.com\\\/uk\",\"name\":\"FasterDraft\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/fasterdraft.com\\\/uk?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-GB\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Director Service Agreement Template UK \u2013 Compliant with UK Company Law","description":"Create a professional UK director service contract in minutes with this customisable template. Easy to edit, legally structured, and ready for instant download.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template","og_locale":"en_GB","og_type":"article","og_title":"Director Service Agreement Template UK \u2013 Compliant with UK Company Law","og_description":"Create a professional UK director service contract in minutes with this customisable template. Easy to edit, legally structured, and ready for instant download.","og_url":"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template","og_site_name":"FasterDraft","article_modified_time":"2026-07-30T18:23:51+00:00","og_image":[{"width":1241,"height":1754,"url":"https:\/\/fasterdraft.com\/wp-content\/uploads\/2026\/07\/Director-service-agreement-template-UK.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_misc":{"Estimated reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template","url":"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template","name":"Director Service Agreement Template UK \u2013 Compliant with UK Company Law","isPartOf":{"@id":"https:\/\/fasterdraft.com\/uk#website"},"primaryImageOfPage":{"@id":"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template#primaryimage"},"image":{"@id":"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template#primaryimage"},"thumbnailUrl":"https:\/\/fasterdraft.com\/wp-content\/uploads\/2026\/07\/Director-service-agreement-template-UK.jpg","datePublished":"2026-07-30T12:07:28+00:00","dateModified":"2026-07-30T18:23:51+00:00","description":"Create a professional UK director service contract in minutes with this customisable template. Easy to edit, legally structured, and ready for instant download.","breadcrumb":{"@id":"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template#breadcrumb"},"inLanguage":"en-GB","potentialAction":[{"@type":"ReadAction","target":["https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template"]}]},{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template#primaryimage","url":"https:\/\/fasterdraft.com\/wp-content\/uploads\/2026\/07\/Director-service-agreement-template-UK.jpg","contentUrl":"https:\/\/fasterdraft.com\/wp-content\/uploads\/2026\/07\/Director-service-agreement-template-UK.jpg","width":1241,"height":1754,"caption":"UK Director Service Agreement Template \u2013 Editable Word & PDF document for appointing a company director and defining their service terms, duties, remuneration, and termination conditions."},{"@type":"BreadcrumbList","@id":"https:\/\/fasterdraft.com\/uk\/product\/director-service-agreement-template#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/fasterdraft.com\/uk"},{"@type":"ListItem","position":2,"name":"All Legal Templates","item":"https:\/\/fasterdraft.com\/uk\/legal-templates"},{"@type":"ListItem","position":3,"name":"Director Service Agreement"}]},{"@type":"WebSite","@id":"https:\/\/fasterdraft.com\/uk#website","url":"https:\/\/fasterdraft.com\/uk","name":"FasterDraft","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/fasterdraft.com\/uk?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-GB"}]}},"_links":{"self":[{"href":"https:\/\/fasterdraft.com\/uk\/wp-json\/wp\/v2\/product\/6063","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fasterdraft.com\/uk\/wp-json\/wp\/v2\/product"}],"about":[{"href":"https:\/\/fasterdraft.com\/uk\/wp-json\/wp\/v2\/types\/product"}],"replies":[{"embeddable":true,"href":"https:\/\/fasterdraft.com\/uk\/wp-json\/wp\/v2\/comments?post=6063"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fasterdraft.com\/uk\/wp-json\/wp\/v2\/media\/6068"}],"wp:attachment":[{"href":"https:\/\/fasterdraft.com\/uk\/wp-json\/wp\/v2\/media?parent=6063"}],"wp:term":[{"taxonomy":"product_brand","embeddable":true,"href":"https:\/\/fasterdraft.com\/uk\/wp-json\/wp\/v2\/product_brand?post=6063"},{"taxonomy":"product_cat","embeddable":true,"href":"https:\/\/fasterdraft.com\/uk\/wp-json\/wp\/v2\/product_cat?post=6063"},{"taxonomy":"product_tag","embeddable":true,"href":"https:\/\/fasterdraft.com\/uk\/wp-json\/wp\/v2\/product_tag?post=6063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}