Posted on October 10, 2022  
by Noel Guilford

Most UK companies are formed using what are called “model articles.” These are contained in the Companies Act 2006 and were designed a ‘one size fits all’ solution. Until now pretty much everyone, including sole director companies, have adopted them.

However, a recent high court judgement has changed that!

In the model articles section 11(2) states: The quorum for directors’ meetings may be fixed from time to time by a decision of the directors, but it must never be less than two, and unless otherwise fixed it is two.

The case of Hashmi v Lorimer-Wing 2022 was the result of a dispute between directors, leaving the company with one director. The High Court Judge decided in the case that model articles are not suitable for single director companies. As a result sole directors have a couple of options about what to do:

Appoint another director: It sounds obvious but might not work for everyone, the company probably has a sole director for a good reason so appointing another director isn’t probably a good idea.

Change the Articles: Assuming you don’t appoint another director, then you have to do this which following the High Court decision thousands of companies will now be doing. But it won’t fix decisions already taken by a sole director!

You will need a written shareholders’ resolution to ratify decisions taken by you as a sole director. You then have 15 days from signing the resolution to file it at Companies House!

So don’t worry, if you have model articles and you are a sole director, a resolution and new articles will fix the situation.

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