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Law: Is a Shareholder or Director an Employee?

When a company goes into liquidation there is a statutory scheme operated by the DTI to cater for redundancy payments that otherwise could not be made.

In the case of Nesbitt v Secretary of State for Trade and Industry, it was clarified that providing the status of such persons was not a sham, then there is no reason why they cannot be considered employees.

Many clients will identify with the situation where they don’t have the good fortune to languish in warm countries while the business gets on with itself.

As a shareholder or director they are by necessity working hard to run their business and should rightly be considered as employees also.

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