🔍 Sole Director Companies: Why You Might Need to Amend Your Articles Now

If you’re the sole director of a limited company using the standard Model Articles of Association, a recent court case might affect your ability to make decisions legally—and even cause problems when securing finance. Here’s what you need to know.

🚨 The Legal Case: Hashmi v Lorimer-Wing

The High Court case Hashmi v Lorimer-Wing (2022) highlighted a conflict in the Model Articles used by many UK companies. Specifically:

• Model Article 7 states that a sole director may manage the company.
• Model Article 11 requires a minimum of two directors to form a valid quorum for decision-making.

The court ruled that Article 11 takes precedence, meaning a sole director may not have the legal authority to make decisions alone unless the Articles have been amended.

🏦 Why This Affects Property Companies and Lenders

This issue is becoming more common where property is purchased through a limited company. Many lenders are now:

• Reviewing company Articles before approving mortgage finance
• Raising concerns where only one director is listed but quorum rules require two
• Rejecting or delaying deals until the company resolves the issue

This is particularly problematic for buy-to-let companies or SPVs (Special Purpose Vehicles) used for property acquisition.

✅ What You Should Do

If you’re a sole director, you should act now to reduce risk and avoid complications:

1. Review your Articles of Association
   Check if you’re using unmodified Model Articles and whether Article 11 is still in place.
2. Amend the Articles
   Update your company’s constitution to make it explicitly clear that a sole director has full authority to make decisions.
3. Ratify past decisions
   To avoid any future legal challenges, consider formally ratifying previous decisions made while Article 11 was in force.

🔧 How We Can Help

At Taxes Done Right Ltd, we help sole director companies stay compliant and lender-ready. Our legal partners can:

• Review your current Articles
• Draft and file amendments at Companies House
• Provide minutes and resolutions to formalise the changes
• Assist with ratifying past decisions

Whether you’re preparing for a property purchase or simply want to protect your company’s legal standing, we’re here to help.

📞 Get in Touch

Worried your Articles might be putting your company at risk?
Let us handle the legal paperwork—so you can focus on running your business.