Can a Sole Director Make Decisions? Understanding Director Appointments and Quorum Rules in UK Companies

When it comes to company management, especially within private limited companies, one of the most frequently misunderstood topics is whether a sole director can validly make decisions on their own. This issue becomes particularly important where a company’s board has reduced in number—due to resignations, dismissals or death—and it is unclear whether the remaining director(s) can continue acting on behalf of the company.

In this article, we explore the legal requirements for director appointments and quorum, and how model articles of association interact with these rules.

Minimum Number of Directors: What the Law Requires

Under section 154 of the Companies Act 2006, a UK private limited company must have at least one director, and that director must be a natural person (i.e. a human being), as stated in section 155. Public companies are required to have at least two directors.

If a company fails to meet this minimum, the Secretary of State may issue a direction requiring the company to appoint a director within a specified period (section 156). Failure to comply constitutes a criminal offence, for which both the company and its officers may be liable.

In practice, most private companies comply with these minimum thresholds. However, problems often arise when the number of directors drops below what is required by the company’s own articles of association, or when the remaining directors fall below the quorum required to take valid decisions.

What is Quorum and Why Does it Matter?

A quorum is the minimum number of directors required to hold a valid board meeting and make decisions. In companies using the model articles of association for private companies limited by shares, article 11(2) states that the quorum for directors’ meetings is two, unless otherwise fixed by the directors.

However, article 7(2) of the same model articles allows for a sole director to make decisions alone, stating:

“If the company only has one director, and no provision of the articles requires it to have more than one director, the general rule about decision-making by directors does not apply, and the director may take decisions without regard to any of the provisions of the articles relating to directors’ decision-making.”

This has given rise to a legal debate: What happens if a company originally had more than one director, but now has only one? Can that sole remaining director continue to manage the company?

Case Law Interpretation: Can a Sole Director Act?

Over the past few years, the courts have taken different approaches to this question.

• In Hashmi v Lorimer-Wing (Re Fore Fitness Investments) [2022], the High Court interpreted article 11(2) strictly and found that a quorum of two directors was required, making the sole director's decisions invalid.

• In Re Active Wear Ltd [2022], the court held that article 7(2) allowed a sole director to act independently if the company had adopted unamended model articles, even if the company previously had more than one director.

• Most recently, in Re KRF Services (UK) Ltd [2024], the court upheld the validity of a sole director’s decisions under article 7(2), confirming that a previously multi-director company can continue to be managed by a sole director, provided the articles do not require otherwise.

While Re KRF Services provides comfort to companies relying on model articles, it is important to note that High Court decisions at first instance are not binding, meaning future courts could interpret the model articles differently.

When Can Remaining Directors Act Despite Lacking a Quorum?

Where a company’s board becomes non-quorate, either due to resignations or death, the default position is that the board cannot act. This principle was established in Re Alma Spinning Co (1880): a board that no longer satisfies the minimum required by the articles is considered not properly constituted, and its actions are invalid.

However, the company’s articles may include provisions allowing the remaining directors to act, for example:

• To fill a vacancy, or

• To call a general meeting.

This was confirmed in Re Scottish Petroleum Co (1883), where the articles allowed continuing directors to act despite vacancies. As two directors remained from an original board of four, they were allowed to continue decision-making because:

1. The board was properly constituted at the start, and

2. The articles explicitly permitted such action.

Who Can Appoint New Directors in Case of Vacancies?

If the articles empower “the remaining directors” to appoint someone to fill a vacancy, this can usually be done even by a single director—as confirmed in Channel Collieries Trust Ltd v Dover (1914).

However, if the articles state that appointments must be made by “the board”, this has been interpreted to mean a quorate board (as in Faure Electric Accumulator Co Ltd v Phillipart (1888)). In such cases, if the board lacks quorum, it cannot appoint new directors. Instead, the general meeting of shareholders may need to appoint directors.

Best Practice: Review Your Articles Proactively

Given the inconsistencies in judicial interpretation and the critical role played by the company’s articles of association, companies are strongly advised to:

• Review their articles to ensure they align with their intended governance structure.

• Clarify quorum rules and director appointment powers.

• Include fallback provisions, allowing remaining directors to act in limited situations (e.g. to fill vacancies or convene meetings).

Such foresight can help avoid operational paralysis in times of unexpected change—such as illness, resignation or death of a director.

Conclusion

Whether or not a sole director can act validly depends heavily on the company’s articles of association. While recent case law has affirmed the power of sole directors in companies with unamended model articles, this area remains legally nuanced. Clear, proactive drafting in the articles can significantly reduce risk and provide continuity in company management.

Sources

Some of the legal cases and statutory references discussed in this article are publicly available and widely covered across legal practice resources including:

• Practical Law UK Practice Notes (Thomson Reuters)

• LexisNexis UK

• Westlaw UK

• Companies Act 2006

• Relevant case law including Re KRF Services Ltd [2024], Hashmi v Lorimer-Wing [2022], Re Active Wear Ltd [2022], Re Alma Spinning Co (1880), Re Scottish Petroleum Co (1883).

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