I've been offered a contract with a small company (plc) which includes some % profit-share. The business is 100% owned by one lady who is also its sole director. She works full time in the business. She maintains that as 100% shareholder, she can set her salary at whatever level she wants, regardless of her actual duties/working hours. This seems unfair as it could affect the profits, and hence my proposed profit-share. As the company director, does she have any legal obligation to only pay herself a salary commensurate with her actual duties, so as not to manipulate the profits to her own personal advantage?
Duty of director/sole owner
- Thread starter MPO
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Depends how the profit share is organised. ATM she can do as she wants, but once a properly worded agreement is put in place she will need to abide by the agreement. And if the wording is not done properly and you give her wriggle room then she has already indicated she is likely to wriggle to your detriment.
Get the agreement done properly.
Get the agreement done properly.