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Model Articles sole director decision making not permitted?
03 October 2022
In the recent case of Hashmi v Lorimer-Wing [2022], the High Court has determined that a private limited company operating under the Model Articles must have a minimum of two Directors, and that Model Articles require amendment to permit a single Director to make decisions.
London Law’s bespoke Articles already have the provision for a sole Director and our legal consultant considers there to be minimal risk for companies incorporated with our Articles, however, in light of this ruling we have strengthened the wording as follows.
Essentially the amendments clarify that:
- the quorum for directors’ meetings is one director if there is only one director in office
- if directors are voting to approve a conflict of interests and there are insufficient non-conflicted directors to form a quorum, the non-conflicted directors will be counted as a quorum
- if there are insufficient directors still in office to form a quorum (this may be the case where there is more than one director in office but the quorum has been increased beyond the standard figure of two) then the remaining directors can act to appoint further directors or to call a GM to do so.
Whilst we will still offer the ability to choose Model Articles within our software we would recommend using London Law’s bespoke Articles in situations where there will be a sole director.
London Law can also prepare the necessary board minutes and resolutions to adopt bespoke Articles for companies previously incorporated with Model Articles.
For more information please contact 020 7353 9471 or email:
Mick Skinner mick.skinner@londonlaw.co.uk or Jeremy Osborne Jeremy.osborne@londonlaw.co.uk