Company directors and contracts of employment

[N2O]

If a co. director (and shareholder) works for a company and receives renumeration (PAYE salary plus dividends), is there a legal requirement to have a contract of employment?

If so, I assume that contract of employment can be sufficiently loose? i.e. "Receives £20k a year salary for doing IT consultancy, blah blah notice period, times, place of work at their discretion" etc

I appreciate there may be sensible reasons for making the contract stricter, but I'm just seeing what I can get away with here

Edited by N2O on Tuesday 27th June 19:05

[mogul]

I would suggest that any employee of a company should have a contract if no other reason but to protect other directors/shareholders. Imagine how much trouble you'll be in if you don't have a watertight contract and then an employment issue that goes to a tribunal......I for one would be worried!

I thought you also had to (in theory) present a contract within 14 days of starting employment?

[Eric Mc]

There is no LEGAL requirement for a contract - although a formal contract is always a good idea. A shareholder/director's agreement would be quite a bit more detailed than an "employee" contract as it would need to include terms relating to the shareholder's rights as part owner of the business and his/her respnsibilities as a director.