Articles of Association for Sole Director Companies

In the 2022 case of Hashmi v Lorimer-Wing (also known as Fore Fitness Ltd), the High Court suggested that under the Model Articles for private limited companies, the minimum number of directors required for a company to function was two. Whilst this was contrary to what was the previously accepted legal wisdom, the general legal consensus was that for sole director companies that used standard, unamended Model Articles, their boardroom decisions could be challenged and declared invalid. There was concern that this case called into question the ability of a sole director to run a company.

Considering this, many sole director companies wished to adopt new articles of association to resolve any potential confusion. These template articles can be used for this purpose. They are based on the Model Articles for private companies limited by shares but at the beginning disapply model article 11(2) so that decisions made by the sole director are valid. These template articles may be used by new or existing sole director companies.

Note that subsequent to the case of Hashmi v Lorimer-Wing, the cases of Re Active Wear Limited (in administration) and most recently, KRF Services (UK) Ltd (2024), both suggest that sole directors can take all decisions of the company, therefore resolving any potential confusion. It is however still considered sensible best practice to tread with care in this area and if the intention is that the company should be able to operate with only one director, the articles should make this crystal clear. This template is therefore useful in making this clarification.

It is recommended to seek independent legal advice before making any changes to a company's constitution.

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