Hi

In yesterday’s email I set out some simple steps you can take if you are the sole director of a limited company using model articles which contain Article 11 requiring a minimum of two directors for a board decision to be effective.

I should have known better than to think my esteemed colleagues in the legal profession would agree on something and was quickly reminded – thank you Paul Lounds – that in the recent case of Re Active Wear Limited (in administration) the appointment of an Administrator by a sole director of a company with unmodified model articles, was found to be valid notwithstanding the earlier High Court decision in Re Fore Fitness Investments Holdings Ltd [2022].

You can read about at https://www.natlawreview.com/article/re-active-wear-reversal-sole-director-ability-to-appoint-administrators.

This reminded me of a statement that I leaned early in my career that “two people could look at the same set of facts and come to radically different conclusions.”

I’ll leave the final word to The National Law Review: “As things stand, although Active Wear goes some way to clarifying the powers of a sole director to place a company into administration, there remain ambiguities in certain circumstances and as we have noted above it is advisable to proceed carefully in such cases.  Active Wear may not, be the last decision we see that considers whether an administrator has been validly appointed following a decision of a sole director.”

Such is the nature of life.

Noel Guilford