If a company is to engage employees, it will need an employment contract and advice on its obligations as an employer.
There are a variety of other ways that a person could do work for your company: as a PAYE employee, as a self-employed person, via a limited company and/or as a temporary worker. There are different benefits and consequences of such arrangements and it is important to get the contracts and the internal administration right to avoid expensive mistakes.
Obviously, the type of individual and the basis for their employment will depend on the company’s business, its expansion plans, the volume of business, the cash flow and the need to retain skilled employees. All of this will determine whether employees are sourced on a temporary or permanent basis, either full- or part-time.
With regard to directors’ interests, how will you reward yourself for the work you do for the business? If you do not have another means of support, are you going to rely on shareholder dividends, loans from the company or will you need a regular income? A director’s service contract will set out your duties to the company and terms of your remuneration and benefits, but it will also be binding in these respects and needs to be properly drafted.
Obtaining advice on employment issues is incredibly important for companies, both new start-ups and ongoing successful businesses. Errors can lead to claims for unfair or wrongful dismissal, as well as many other types of claim, and is essential that the company gets this right with all employees and directors.
