Sole director limited company: how to amend your articles to meet lender requirements

If you are taking out a buy-to-let mortgage in your limited company's name, your conveyancing solicitor may have told you that you need to amend the company's articles of association first. The reason is that the lender wants the articles to allow a sole director, meaning you, to take decisions such as taking out that mortgage. The fix is a short, five-step process: complete a set of amended articles, pass a written special resolution as the shareholder, sign it, and file both documents at Companies House. With the right templates, anyone can do this in one sitting, which saves on legal fees and avoids delays on the purchase.

Why lenders ask sole directors to amend the model articles

Many property investors run their buy-to-let portfolio through a limited company where they are the only director and the only shareholder. If that company was incorporated under the Companies Act 2006 and adopted the model articles, the lender may not be satisfied that one director acting alone can validly take a decision as significant as borrowing against a property. So the conveyancing solicitor asks for the articles to be amended to allow for one director to make decisions.

I know that people investing in property are often busy professionals with other things to worry about than learning the Companies Act, so I have tried to make the process as quick and affordable as possible. Doing it yourself with the right templates saves you legal fees, and just as importantly it avoids a delay in the purchase while you wait for someone else to deal with the paperwork.

The templates you need

To amend the articles you need three documents, which I provide as free templates:

• A step-by-step guide. This is the document the process below follows.
• Document A: the amended articles of association. These are the model articles, amended to allow one director to take decisions. They replace the articles your company adopted on incorporation.
• Document B: the written special resolution. This evidences the fact that the shareholder is in favour of amending the articles. It is what makes the change comply with the Companies Act 2006.

Who this process applies to

This is important, so check it before you do anything else. These documents only work if all of the following are true:

• the company is a limited company registered in the UK;
• it was incorporated under the Companies Act 2006;
• it adopted the model articles of association; and
• you are the sole director and the sole shareholder of the company.

If any of those conditions is not met, do not use the templates as they stand, because the wording and the signing arrangements assume a single person is both the director and the shareholder. Speak to a corporate solicitor first, because a company with bespoke articles, more than one shareholder or more than one director will need a different approach.

How to amend the articles of association: the five steps

There are only five steps. Anywhere you need to add information in the templates is marked with square brackets and highlighted in yellow, so you simply replace the highlighted wording with your own details. Nothing else in the documents needs to change.

Before you start, download the templates and open the step-by-step guide alongside documents A and B. Having all three open at once makes the process much quicker.

• Step 1: add your company's details to document A (the articles). There are only two things to add. First, your company's registered name exactly as it appears on Companies House, including the "Limited" or "Ltd" part. Second, your company's registration number, again as shown on Companies House.
• Step 2: add your details to document B (the written resolution). Replace the highlighted wording with your company's registration number, the registered name as shown on Companies House, today's date (the date the resolution is circulated and passed), and the name of the shareholder. If the company is wholly owned by you as an individual, that is your own name. If you have a group structure where a holding company owns this subsidiary, the holding company's name goes here instead. Whoever the shareholder is, their name goes in that space.
• Step 3: sign the written resolution. Once document B is completed, add your signature and the date. Document A does not need to be signed.
• Step 4: file the written resolution at Companies House. Document B is filed first. See below for exactly how.
• Step 5: file the amended articles at Companies House. Document A is filed second, by repeating the same upload process.

How to draft the written special resolution

The written resolution is the document that shows the shareholder has approved the change. It matters who signs it. In a simple case the shareholder is you personally, so your name goes in and you sign. In a group structure, the shareholder is the holding company, so the holding company is named as the shareholder passing the resolution. Getting this wrong is an easy slip, so check the shareholder's name against the company's records on Companies House before you sign. The date you enter should be the date the resolution is circulated and passed, which for a sole shareholder is simply the day you sign it.

How to file the special resolution at Companies House

This is not done through the usual WebFiling account you might use to submit your confirmation statement. It uses a different service on GOV.UK, called "Upload a document to Companies House". The steps are:

• Open the "Upload a document to Companies House" page and click "Start now".
• Enter your company's registration number and confirm that the company shown is the correct one.
• Choose change of constitution as the type of filing. You are changing the articles of association, which form part of the company's constitution, and the page itself explains this.
• Select the option to submit the resolution, then continue.
• Enter your company's authentication code. You will have received this from Companies House, usually by letter. You can request it again if you have lost it, but it is posted out and takes time, so it is best to find it in your records if you can. If you are up against a completion date on the property purchase, chase this code early.
• You may see a warning message at this point. It is not relevant to this filing, so continue.
• Click "Choose file", select the signed and dated document B, upload it and submit.

How to file the amended articles at Companies House

Once the resolution is submitted, you move on to the articles. Document A does not need to be signed; it just needs your company's name and number filled in. Download it as a PDF and repeat the upload process:

• Go back to the "Upload a document to Companies House" page and enter your company's registration number.
• Confirm the company is correct and choose change of constitution again.
• This time, select the option to submit the articles rather than the resolution.
• Choose the PDF of document A, upload it and submit.

That completes the process. The resolution and the amended articles are both on the public record, and your conveyancing solicitor can show the lender that a sole director is allowed to take the decision. Keep to that order: the resolution first, then the articles.

Companies House upload timeout: a quick tip

At the time of recording, the Companies House upload pages had a habit of timing out and failing if you were not fast enough. It is a frustrating system. If you keep seeing error messages saying you cannot proceed, the only fix I have found to work is to move through the process quickly: have your authentication code and both PDF files ready before you start, know which company you are filing for, and do not leave the page sitting idle between steps while you look for something. Hopefully the issue will have been resolved by the time you do this, but it is worth being prepared.

Next steps

Check that you meet all four conditions, complete documents A and B, sign the resolution, and file the resolution followed by the articles using the upload service. If your company has more than one director or shareholder, or does not use the model articles, speak to a corporate solicitor before amending anything. And if you are building a portfolio of companies, it is worth thinking about a group structure so that assets such as property or intellectual property can be ring-fenced.