Can a Sole Director be a Quorum for Company Board Decisions?

What Is A Quorum?

A quorum is achieved if enough people are present to constitute a valid meeting. In a company context, the quorum requirements for board meetings will typically be set out in the bespoke Articles of Association of the company concerned. These provisions could, for example, specify that a minimum of two directors are required to be present to hold a valid board meeting.

Of course, not all companies have bespoke Articles of Association, and many still rely on the precedent Model Articles prescribed in the schedules to The Companies (Model Articles) Regulations 2008. In the case of private companies limited by shares, the relevant form of Model Articles is contained in Schedule 1.

Potential Quorum Issues for Sole Director Companies Relying on the Model Articles

Past issues have arisen with the Schedule 1 Model Articles when it comes to decision-making by sole directors. This is because of a potential conflict between Article 7(2), which allows a sole director to make decisions, and Article 11(2), which requires a quorum of at least two directors for meetings to be quorate.

Helpfully, case law from 2022 (Hashmi -v- Lorimer-Wing) supported the view that, where no modifications have been made to the Model Articles, Article 7(2) should take precedence over Article 11(2), allowing a sole director to act independently. However, perhaps unhelpfully in the interests of providing overall certainty, the non-binding view expressed by the Court at the time suggested that this principle only applies if the company concerned has only ever had one director which of course may not be the case with many sole director companies.

The Current Position

The above uncertainty was clarified by the High Court in 2024 (Re KRF Services (UK) Ltd) when it was held that where a company has adopted unamended Model Articles, a sole director can act independently by virtue of Article 7(2) regardless of how many directors the company may have had in the past.

How We Can Help

Although the above judgements are helpful for sole directors, because of the ambiguity which still remains in the Model Articles today, the prudent advice is that sole director companies should amend their Articles of Association to avoid any possible uncertainty over whether a sole director has the authority to legitimately act independently.

The Corporate and Commercial team at Wilson Browne Solicitors is ideally placed to advise on all legal aspects of company Articles of Association and how these may be tailored to cater for the bespoke requirements of the company concerned, including for sole director companies.

For a confidential and no obligation initial discussion about how we may be able to help, please contact the Corporate and Commercial team at 0800 088 6004.