Incorporated Before 2009? Your Articles May Lack the Rescue

If your company was incorporated before October 2009, the rescue that lets the family of a sole director who has died appoint a replacement may simply not exist in your articles, leaving no easy way to appoint a new director at all. The Companies Act 2006 model articles carry that rescue at article 17(2). The older Table A articles that most companies formed under the Companies Act 1985 adopted do not carry anything like it. So before anyone panics, and before anyone pays a solicitor, the first thing to establish is which set of articles your company actually has.

This matters because a directorship dies with the director. When the only director of a company dies, there is nobody left who can sign a cheque, run the payroll, deal with the bank or file anything at all. If that same person was also the only shareholder — the ordinary one-person-company set-up — there is also no member left to hold a meeting and vote a replacement director in. The company is not merely leaderless. On paper it can be genuinely stuck.

The good news is that the test for which articles you have is quick, free, and sitting in your own filings at Companies House. And even a company that turns out to have no built-in shortcut is not beyond help: the way out is slower and it costs money, but it exists. This page shows you how to check, and what to do if the check comes back badly.

The short version: your articles decide whether there is a shortcut

Every UK company has a constitution, and the most important part of it for this question is the articles of association. The articles set out who can appoint directors, how, and in what circumstances. They are the rulebook that governs what happens when the board falls empty.

The Companies Act 2006 introduced a standard set of model articles that took effect on 1 October 2009. Most companies formed on or after that date adopted them, either deliberately or by default. Buried within them, for private companies limited by shares, is article 17(2): a specific provision for the worst case, where a company is left with no shareholders and no directors because the last one has died. It hands the deceased's personal representatives the power to appoint a director by written notice.

Companies incorporated before that date were formed under the Companies Act 1985, and the default articles then were known as Table A. Table A is a perfectly workable set of rules for a company that keeps running. What it does not contain is a clean answer to the situation where the only director and only shareholder dies at the same moment. There is no Table A equivalent of article 17(2), and that single omission is the difference between a family that can act within days and a family that has to go to court.

So the year of incorporation is a useful first clue, but it is only a clue. The real answer is in the document itself, because a company can adopt whatever articles it likes. A modern company can still be running on Table A if it chose to. An old company might have replaced its articles years ago. You have to look.

First, find out which articles your company actually has

You do not need a lawyer for this part. Every company's filed constitution is public. Search your company on the register using the free Companies House company information service, open the filing history, and look for the articles of association — often filed with the original incorporation documents (form IN01), or as a later special resolution if the articles were changed.

Read what comes up, and place it in one of three buckets.

• 2008 model articles. If the document is short and refers to the model articles, or simply adopts them without amendment, you are almost certainly in the best position. The article 17(2) power is there unless it has been specifically excluded.
• Table A, from the 1985 regime. If the articles refer to Table A, or adopt Table A "with the modifications set out below," or you find a longer set of regulations numbered in a way that matches the old table, you are in the bucket this page is written for.
• Bespoke articles. Plenty of companies, especially those set up with an accountant or solicitor, have tailored articles that follow neither template cleanly. Here the answer depends entirely on what your particular document says about appointing directors when the board is empty, and it needs reading line by line.

The full text of the model articles is on the statute book if you want to compare your own document against it. The Companies (Model Articles) Regulations 2008 set them out in full, including the private-company set that contains article 17. If your articles read differently from that, treat the difference as significant and get them checked.

What the 2008 model articles give you: article 17(2)

The point of article 17(2) is narrow and deliberate. It is written for exactly one calamity: a company that has ended up with no shareholders capable of acting and no directors at all, because the person who was both has died. In that specific case the model articles let the personal representatives of the deceased appoint someone as a director by notice in writing, even though those representatives are not yet registered as members themselves.

That last clause is what makes it work. In the ordinary course, appointing a director needs the shareholders to act, and the deceased's family are not shareholders yet — they are only entitled to become shareholders once the shares are formally transferred to them. Article 17(2) cuts through that chicken-and-egg problem by letting the representatives appoint a director first. The new director can then get the company moving again, including dealing with the shares in the proper way.

None of this is instant, because the representatives still have to be able to prove they are entitled to act — which usually means producing the grant, and in the meantime the bank and everyone else will want to see it. But it is a route, and it is a route the family can walk without a judge. That is the whole value of it, and it is precisely the value a Table A company does not have.

What Table A leaves out, and how a company gets stuck

Follow the same death through a Table A company and watch where it jams. The sole director dies, so the board is empty. The shares are still registered in the dead person's name, so there is no living shareholder who can vote. The personal representatives are entitled to the shares by transmission, but under Table A they do not become members — and cannot vote — until they are entered in the register of members. And entering someone in the register of members is normally a job for the directors. There are no directors.

So the family cannot appoint a director because they cannot yet vote, and they cannot yet vote because there is no director to register them. Each door is locked by the other. The company keeps existing, but nobody inside it can lawfully do anything: not pay staff, not release a customer's goods, not stop a supplier's chaser, not even close the account down in an orderly way.

This is not a drafting quirk that only bites in theory. It is the standard failure mode of the older one-person company, and the courts have dealt with exactly this fact pattern — a sole director and shareholder who died leaving articles with no appointment power — more than once. The remedy each time is the same, and it involves going to court.

The way out when there is no shortcut: an application to court

The usual route out of the deadlock is an application under section 125 of the Companies Act 2006 to rectify the register of members. In plain terms, you ask the court to order that the personal representatives (or the people who inherit the shares) be entered in the register as the members. Once they are on the register, they can vote, and once they can vote they can appoint a director and take control of the company in the normal way.

There is a second route the court can use, under section 306 of the same Act, where a judge orders a general meeting to be held and directs that a single member present will count as a valid quorum. Which application fits depends on the exact wording of your articles and the facts, and this is the point at which you do need a solicitor. It is not a form you file at Companies House; it is a court application, with the cost and the timetable that implies.

Understand what that means for the business in the gap. The application takes time. During that time the company still cannot trade properly, the bank account is likely frozen, and the pressure from customers, suppliers, HMRC and staff does not pause because a court date is pending. A business that depends on daily cash flow can be badly damaged, or lost entirely, in the weeks it takes to unlock the board — which is why the difference between having article 17(2) and not having it is not academic. It is the difference between a bad fortnight and a business that does not survive the delay.

Owning the shares is not the same as being able to run the company

One of the reasons families are caught out is a very natural assumption: that whoever inherits the company gets to run it. They do not, at least not automatically. Inheriting shares gives you ownership and, eventually, votes. It does not make you a director, and it is the director's role, not the shareholder's, that carries the power to sign, spend and decide day to day.

That distinction runs right through this cluster of problems, and it is worth understanding before you write a will that assumes otherwise. We have set it out separately in the specific case of leaving your shares to a child who cannot be appointed a director, where the person you name as your successor ends up owning the business but blocked from controlling it.

It is also worth being clear that all of this is a limited-company problem. If you trade as a sole trader rather than through a company, none of the articles question arises, because there is no company and no board to fill — but a different and equally awkward set of issues does, around the tax on money that keeps arriving after a self-employed person dies. The structure you trade through decides which trap you are walking towards.

The hour of your evening that avoids all of this

The honest conclusion of a page like this is unglamorous. The fix for a stuck company is expensive and slow. The fix for the risk of a stuck company is cheap and fast, and it is available to you right now while you are reading.

Check your articles tonight using the register. If they are the model articles, confirm article 17(2) has not been excluded, and make sure there is at least a named person the family would put forward. If they are Table A or an old bespoke set with no appointment power, the sensible step is to have the articles updated to a modern set — or, better for a genuine one-person company, to appoint a second director now, so the board never falls empty in the first place. A second director you trust changes the whole picture: the company keeps functioning on the day of the death instead of freezing.

Alongside the constitution, look at the money. A company that has to survive a court application needs cash to do it, and the family that inherits it may need cash of their own while everything is locked. This is the point of business protection and personal cover: to put money where it is needed at the moment the person is lost, rather than months later. If you are an employee-director with an employer-arranged plan, it is worth knowing what happens to that policy if you ever leave the company, so a gap does not open up by accident. And separately, cover on the owner that pays the business rather than the household is its own decision, one we cover in why key person cover pays the company, not your family.

If you want to see what protecting the people and the business would actually involve, you can get life insurance quotes and have an FCA-authorised broker price cover against your real situation. And if you would rather read around the wider topic first, our guide to what happens to a business when the owner dies collects the related questions in one place.

Scotland and Northern Ireland

Company law is not devolved. The Companies Act 2006, the model articles and the old Table A regime apply the same way in England, Wales, Scotland and Northern Ireland, so the articles question — and the article 17(2) rescue, or its absence — works identically wherever your company is registered.

What differs is the machinery of proving that the personal representatives are entitled to act. In England, Wales and Northern Ireland that is a grant of probate where there is a will, or letters of administration where there is not. In Scotland the equivalent is confirmation, obtained through the sheriff court. A court application to rectify the register would be made in the High Court in England, Wales and Northern Ireland, and in the Court of Session in Scotland. Neither difference changes the underlying trap: if the articles contain no power to appoint a director on the death of the last one, the family faces a court process rather than a shortcut, wherever in the UK the company sits.

Frequently asked questions

How do I know which articles my company has?

Download the company's filed documents from the Companies House register and read the articles of association, or the memorandum for older companies. Companies formed from October 2009 usually adopt the model articles, while earlier ones often relied on Table A from the Companies Act 1985 regime. The date is only a hint, though, because a company can adopt whatever articles it chooses, so the reliable answer is in the filed document itself rather than in the year of incorporation.

Why does it matter which articles apply?

Because the model articles contain a provision, article 17(2), that lets the personal representatives of a deceased sole shareholder-director appoint a new director by written notice. Table A has no equivalent. A company with the older articles can therefore be left with no straightforward way to appoint anybody at all when the only director dies, and the family has to unlock it through the courts instead of within the company.

What can a stuck company do?

The usual route is an application to court to rectify the register of members, so the personal representatives can be entered as shareholders and then appoint directors. In some cases the court is instead asked to order a general meeting with a reduced quorum. Either way it takes time and legal cost, and the business is largely frozen while it happens, which is exactly why checking your articles now is worth an hour of anyone's evening.