Transactions with directors - long-term service contracts Flashcards
(3 cards)
1
Q
what is a long-term service contract?
A
a contract with a guaranteed term of more than 2 years
a guaranteed term is a term that D can only be dismissed if they do something seriously wrong
therefore, if the contract was for a longer period but the company could dismiss D, it would not be a long-term service contract requiring SH approval
2
Q
what are the pre-decision requirements?
A
Particulars of the contract must be circulated with the WR / at the registered office for 15 days before the GM and at the GM
3
Q
what happens if Ds do not obtain SH approval?
A
the contract stands but the guaranteed term is void
