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A Director Services Agreement sets out the terms and duties when someone joins a company's board of directors in India. It covers key aspects like compensation, time commitments, confidentiality obligations, and the specific responsibilities they'll handle as a board member.

Under the Companies Act 2013, these agreements protect both the company and director by clearly defining performance expectations, board meeting attendance requirements, and conflict of interest policies. They're especially important for independent directors and help ensure good corporate governance by documenting the director's fiduciary duties and compliance requirements.

Use a Director Services Agreement when appointing new board members to your Indian company, especially independent directors. This agreement becomes essential during leadership transitions, when bringing in industry experts, or when restructuring your board to meet SEBI's corporate governance requirements.

The timing is crucial - put this agreement in place before the director begins their duties. It's particularly valuable when recruiting high-profile directors, establishing subsidiary boards, or when your company is preparing for funding rounds or IPO. Having clear terms from day one prevents misunderstandings about roles, responsibilities, and compensation.

• Standard Executive Director Agreement: Outlines comprehensive terms for full-time directors involved in day-to-day operations, including performance targets and executive responsibilities
• Independent Director Agreement: Features specialized clauses for non-executive board members, emphasizing independence requirements under SEBI guidelines
• Non-Executive Director Agreement: Focuses on part-time advisory roles with lighter operational involvement but strong governance duties
• Nominee Director Agreement: Tailored for directors representing specific stakeholders like venture capital firms or institutional investors
• Whole-Time Director Agreement: Details extensive operational responsibilities and time commitments for directors in full-time management roles

• Board of Directors: Reviews and approves the agreement terms, ensuring alignment with company strategy and governance requirements
• Company Secretary: Drafts and maintains Director Services Agreements, ensures compliance with Companies Act provisions
• Legal Team: Reviews terms, updates clauses, and ensures adherence to SEBI guidelines and corporate law requirements
• Incoming Directors: Negotiate and sign the agreement, committing to specified duties and responsibilities
• Shareholders: May need to approve certain terms, especially for executive directors' compensation packages
• Compliance Officers: Monitor adherence to agreement terms and report any breaches or concerns

• Director Details: Gather full legal name, DIN number, residential address, and proposed role classification (executive/non-executive/independent)
• Compensation Structure: Document proposed fees, sitting charges, profit-sharing terms, and any performance-linked bonuses
• Time Commitment: Specify expected board meeting attendance, committee responsibilities, and other time obligations
• Company Information: Compile company registration details, board composition, and relevant articles of association
• Compliance Requirements: Review latest SEBI guidelines and Companies Act provisions for director appointments
• Internal Approvals: Confirm necessary board and shareholder approvals for appointment terms

• Appointment Terms: Specific role, duration, and category of directorship as per Companies Act 2013
• Duties & Powers: Detailed responsibilities, authority limits, and fiduciary obligations
• Remuneration: Compensation structure, sitting fees, and any performance-linked incentives
• Confidentiality: Non-disclosure obligations and handling of sensitive company information
• Conflict of Interest: Disclosure requirements and handling of potential conflicts
• Termination: Conditions for resignation, removal, and notice periods
• Compliance: SEBI guidelines adherence and statutory obligations
• Indemnification: Protection clauses and liability coverage terms

A Director Services Agreement differs significantly from a Director Appointment Agreement, though they're often confused. While both relate to board positions, their scope and purpose vary considerably.

• Scope and Detail: Director Services Agreements are comprehensive documents covering ongoing duties, compensation, and relationships throughout the tenure, while Appointment Agreements focus mainly on the initial appointment terms and basic qualifications
• Time Frame: Services Agreements govern the entire service period with detailed performance expectations, while Appointment Agreements primarily handle the joining formalities
• Legal Requirements: Services Agreements include extensive provisions for confidentiality, non-compete, and intellectual property rights, whereas Appointment Agreements typically cover statutory compliance and basic eligibility criteria
• Usage Context: Services Agreements are crucial for executive and independent directors with significant responsibilities, while Appointment Agreements suffice for nominal director positions with limited involvement