Sole Directors And Model Articles – Problem Solved?

At a glance

Hashmi v Lorimer-Wing [2022] EWHC 191 (Ch) established a controversial principle in the realm of company law – the model Articles for private companies limited by shares (the "Model Articles") are not suitable for companies with a sole director. You can read our article on that decision here and the consequences for decisions taken by sole directors of private companies under the Model Articles.

However, that decision has come under significant pressure thanks, in part, to the decision later in 2022 in Active Wear Ltd [2022] EWHC 2340 (Ch).

Traditionally, it had been assumed that Model Article 7(2) – while a company only has a sole director, and there is no requirement to have more, the general rule does not apply and a sole director can take decisions – took precedence over Model Articles 11(2) and 11(3), allowing a sole director to make decisions without the need for a board meeting of at least two directors. Hashimi took a knife to