Letter to Auditors Enclosing Written Resolution to Change Articles (Sole Director Companies)
In light of the 2022 case of Hashmi v Lorimer-Wing, a sole director company may wish to adopt new articles of association. Doing so requires shareholder consent, usually by shareholders’ written resolution.
What This Template Does
This template letter is used to write to the company’s auditors. It encloses the written resolution being sent to shareholders proposing the changes to the articles, together with a copy of the amended articles of association.
Why You Might Send This To The Auditors
Although the Companies Act 2006 does not expressly require companies to provide auditors with copies of written resolutions, section 502(1) entitles auditors to receive all communications relating to a proposed written resolution that a company sends to its shareholders. It is also common practice to send auditors a copy of the amended articles.
Given the significance of a resolution to change a company’s articles, it is considered best practice to send the auditors a copy of the written resolution and the amended articles. The letter can also enclose any other relevant communication, such as a note explaining the changes being made. This will only be relevant if the company has an auditor. Most private companies will have auditors unless the directors reasonably resolve otherwise on the grounds that audited accounts are unlikely to be required.
Related Guidance And Background
This template should be read alongside the guidance note and other templates that relate to Hashmi v Lorimer-Wing. Following Hashmi, the cases of Re Active Wear (in administration) and, most recently, KRF Services (UK) Ltd (2024) both suggest that sole directors can take all decisions of the company. Even so, it remains sensible best practice to tread carefully in this area and, where
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