Who Decides?

New case law suggests single person companies with Table A ("Model Articles") need to make changes quickly

Photo by ibrahim ifaax on Unsplash

Going solo? Many companies, and many subsidiaries of group companies, have a single director. It is so easy to click on “accept model articles” when creating a new company that many forget to read them in full.

The High Court case of Hashmi v Lorimer-Wing earlier this year [2022] EWHC 191 (Ch), has called into question the validity of board decisions made by sole company directors with model articles and whether two or more directors are in fact required to constitute a quorum at a board meeting.

The general legal consensus is that following this case, for companies with unamended private company model articles, two or more directors are required to constitute a quorum to hold a board meeting and that the model articles without amendment are no longer suitable for private companies with a sole director.

You should update your companies, if affected, ASAP