Sole Director Decision Making & Company Constitution 
Many sole director private companies will adopt the Model Articles with minor adaptations, such as disallowing the chairman’s casting vote in Model Article 13. Other sole director companies may adopt entirely bespoke articles. It has, however, always been assumed that the legal provisions that relate to the running and decision making of companies extends to sole director companies and specifically that article 7(2) of the Model Articles suspends the normal rules governing company board procedures where the company only has one director.
Under article 7(2), if a company only has one director, and no provision of the articles requires it to have more than one director, the general rule on director decision making is disapplied so that the sole director may take decisions without regard to any of the provisions of the articles relating to directors’ decision making in Model Article 11. Model Article 11(2) requires a minimum of two directors to form a quorum.
The 2022 High Court case of Hashmi v Lorimer-Wing (also known as Fore Fitness Ltd) cast some doubt over this reasoning and questioned whether a director of a private limited company could pass board resolutions while being the only director of the company. For companies with unamended private company Model Articles, this created some concern that two or more directors would be required to constitute a quorum 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 was in response to the judge suggesting that article 11 of the Model Articles (requiring the quorum for directors’ meetings to be never less than two), took precedence over article 7(2).
In addition, there was concern that any decision taken by the sole director of a private company with unamended Model Articles, could be prima facie ultra vires, i.e. open to challenge and capable of being over turned.
However, subsequent to Hashmi, there have been two cases that have suggested that a company which has adopted the Model Articles without modification is able to operate and take decisions while it has only one director. Re Active Wear Limited [2022] EWHC 2340 (Ch) and KRF Services (UK) Ltd [2024] EWHC 2978 (Ch) both suggested the decision in Hashmi was wrong and sole directors can in fact take all decisions of the company, and Model Article 11(2) does not impose a minimum number of directors, resolving any potential confusion. KRF Services is considered particularly persuasive legal argument. The case focused on whether a sole director may alone, under the Model Articles, resolve to file an administration application, even if the company had previously been governed by more than one director. On the facts of the case, sanctions were imposed on the company's beneficial owner, which disrupted the business to the point where the other directors resigned, and replacements could not be found. Ruling that the sole director could ultimately lodge the application in this instance, the High Court confirmed that Model Article 7(2) serves to disapply all directors' decision making provisions in Model Article 11, whether the company previously had more than one director or not.
The judgement in KRF Services Ltd helps resolve the uncertainty that had lingered after Hashmi and best follows the literal interpretation of the Model Articles.
It is however still considered sensible to tread with some caution in this area and it would be helpful for the Court of Appeal to confirm the interpretation in KRF Services Ltd. For the meantime, if the intention is that a company should be able to operate with only one director, the company's articles of association should make this crystal clear.
For those looking to establish a new company, they should ensure that their articles are drafted properly to allow for the company to operate effectively with sole directors if that is what is intended.
Established companies should review their articles, particularly if they have adopted Model Articles 7 and 11 in unmodified or modified form. If such a company needs to be able to function with a sole director, it will need to ensure its articles make this clear, or at the very least, do not contain any provisions that could be seen as setting a minimum number of directors.
Where a company has historically operated with only one director, it may wish to consider obtaining advice on whether any historic decisions taken by the sole director are or may be void.
It is recommended to seek independent legal advice before making any changes to a company's constitution.