Jurisdiction(s):
United Kingdom

England and Wales High Court clarifies sole director powers under Model Articles and court appointment of administrators under UK sanctions, including OFSI licensing and new insolvency licensing purpose

Published on: 05 December 2024

Published by a LexisNexis Restructuring & Insolvency expert

Legal News

Article summary

Re KRF Services (UK) Ltd and others [2024] EWHC 2978 (Ch) What are the practical implications of this case?

For private limited companies using the Model Articles, the ruling confirms that a single director can properly approve board resolutions and commit the company, whether that individual has always acted alone or previously sat on a board with multiple directors, and may do so without infringing the company’s authority or capacity.

From 5 December 2024, the Sanctions (EU Exit) (Miscellaneous Amendments) (No 2) Regulations 2024 (the Amendment Regulations), SI 2024/1157, create a distinct insolvency licensing purpose within the Russia (Sanctions) (EU Exit) Regulations 2019 (the 2019 Sanctions Regulations), SI 2019/855, Pt 1ZB, paragraph 9DD.

The Explanatory Memorandum states that the prior licensing purposes were not always adequate to authorise activities connected with insolvency proceedings, and the new ground supplies a specific basis for permitting such conduct.

Issuing an administration application to the court, and the court’s making of an administration order, does not infringe asset-freezing sanctions even where the company is designated, or is owned or controlled, by a designated individual or entity.

The judgment outlines the factors the court will weigh when determining whether to grant an administration order for...

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