Guidance – Can a Sole Director Run a Company?

The 2022 High Court case of Hashmi v Lorimer-Wing (also known as Fore Fitness Ltd) cast into doubt whether a director of a private limited company could pass board resolutions while being the only director of the company. The general legal consensus following this case was that for companies with unamended private company Model Articles, two or more directors would be required to constitute a quorum in order to hold a board meeting and that the Model Articles without amendment would no longer be suitable for private companies with a sole director.

This guidance note considers this case, the decision, its impact on the Model Articles and quorum requirements. It helps customers to understand the significance of the case as well as discussing the potential solutions that sole director companies may wish to consider putting in place going forward. The guidance also considers the subsequent different decisions reached by the High Court in Re Active Wear Limited (in administration) and most recently in KRF Services (UK) Ltd in 2024, which both allow sole directors to take all decisions of the company.

This guidance balances all these judicial decisions to provide practical suggestions for operating a company with a sole director and recommends that sole director companies still need to tread carefully in this area.

This guidance note should be read in conjunction with our revised model articles for sole director companies as well as the suite of templates that accompany these revised articles.

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

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