Companies Act 2014 section 249

Contracts of employment of directors — control by members over guaranteed periods of employment

Section 249 requires shareholder approval before a company can guarantee a director's employment for more than five years on terms that prevent the company from terminating the contract by giving notice.

• Any director's employment term exceeding five years that the company cannot terminate by notice (or can only terminate in specified circumstances) is a "relevant term" requiring shareholder approval by resolution
• A written memorandum setting out the proposed agreement must be available for inspection at the registered office for at least 15 days before the meeting and at the meeting itself, or circulated with any written resolution
• Any relevant term incorporated without the required approval is void, and the agreement is instead deemed to allow the company to terminate it at any time by giving reasonable notice
• The approval requirement applies to companies formed and registered under the Act, existing companies, and wholly owned subsidiaries of a body corporate, and "employment" includes engagement under a contract for services

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