Board of Advisors Agreement

Purpose: This agreement establishes a formal advisory relationship with reasonable compensation for legitimate business guidance. Proper documentation supports tax deduction of advisory fees and demonstrates business purpose for IRS compliance. #5 Family Employment IRC §162

Agreement Date & Parties

Effective Date:

Advisor Information

Advisor Name:

SSN/EIN:

Address:

City, State, ZIP:

Relationship to Company:

Agreement Terms

1. Appointment

The Company hereby appoints the Advisor to serve as a member of its Board of Advisors, and the Advisor accepts such appointment, subject to the terms and conditions set forth in this Agreement. The Advisor shall serve in an advisory capacity only and does not have fiduciary duties or authority to bind the Company.

2. Advisory Services

Scope of Services: The Advisor agrees to provide business advisory services to the Company, including but not limited to:

Strategic business planning and guidance
Industry expertise and market insights
Financial performance review and recommendations
Business development and growth strategies
Risk assessment and mitigation advice
Operational efficiency recommendations
Marketing and competitive positioning guidance
Such other advisory services as mutually agreed upon

Specific Areas of Expertise (Critical for IRS Documentation):

3. Meetings & Time Commitment

Regular Meetings Per Year:

Hours Per Meeting:

Additional Consultation Hours:

Meeting Format (check all that apply):

In person at Company location

At Advisor's location or other agreed venue

Virtually via video conference

By telephone conference

4. Compensation

In consideration for the advisory services provided, the Company shall pay the Advisor as follows:

Compensation Structure (check applicable):

Per Meeting Fee: $ per meeting attended

Annual Retainer: $ per year

Hourly Rate: $ per hour for additional consultation

Payment Terms (Days):

Payment Frequency:

IRS Compliance Note: Advisory fees must be reasonable and commensurate with the value of services provided. Document the advisor's qualifications, time commitment, and market rates for comparable services. For family members, be especially careful to establish arm's-length compensation.

5. Expense Reimbursement

The Company shall reimburse the Advisor for reasonable out-of-pocket expenses incurred in connection with advisory services, including:

Travel expenses (airfare, mileage, lodging, meals)
Materials and supplies for meetings
Other business expenses pre-approved by the Company

All expense reimbursements require submission of receipts and documentation within 30 days of incurring the expense.

6. Independent Contractor Status

The Advisor is an independent contractor, not an employee of the Company. The Advisor is responsible for:

Payment of all taxes on compensation received
Obtaining any necessary business licenses or permits
Maintaining any required professional liability insurance
Compliance with all applicable laws and regulations

The Company will issue Form 1099-NEC for all advisory fees paid during the tax year.

7. Confidentiality

The Advisor acknowledges that they may have access to confidential and proprietary information of the Company. The Advisor agrees to:

Maintain strict confidentiality of all Company information
Not disclose confidential information to third parties
Not use confidential information for personal benefit
Return all Company materials upon termination of this Agreement

This confidentiality obligation shall survive termination of this Agreement indefinitely.

8. Conflicts of Interest

The Advisor represents that they have no conflicts of interest that would prevent them from providing objective advice to the Company. The Advisor shall promptly disclose to the Company any potential conflicts of interest that may arise during the term of this Agreement.

Current or Potential Conflicts of Interest (if any):

9. Term and Termination

Initial Term (Years):

Termination Notice (Days):

Term: This Agreement shall commence on the Effective Date and continue for the initial term specified above, automatically renewing for successive one-year terms unless terminated as provided below.

Termination: Either party may terminate this Agreement:

With written notice as specified above to the other party
Immediately for cause (breach of agreement, misconduct, conflicts of interest)
Upon mutual written agreement of both parties

Upon termination, the Advisor shall be entitled to compensation for services performed through the date of termination, plus any unpaid reimbursable expenses.

10. No Fiduciary Duty or Authority

The Advisor serves in an advisory capacity only and does not have fiduciary duties or legal obligations beyond those expressly set forth in this Agreement. The Advisor does not have authority to bind the Company, make decisions on behalf of the Company, or enter into contracts or agreements on behalf of the Company unless specifically authorized in writing by an authorized officer of the Company.

11. Entire Agreement

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written. This Agreement may only be amended or modified in writing signed by both parties.

Tax Compliance & Documentation Requirements: To support the business purpose and reasonableness of advisory compensation for IRS compliance, maintain the following documentation:

Meeting agendas and minutes documenting advice provided
Written summaries of strategic recommendations
Evidence of implementation of advisor's suggestions
Comparable market rates for similar advisory services
Documentation of advisor's qualifications and expertise

Signatures

By signing below, both parties acknowledge they have read, understood, and agree to be bound by the terms of this Agreement.

Company Signature

Authorized Signature

Print Name:

Title:

Date:

Advisor Signature