Introduction
Since the introduction of Section 352A of The Companies Act 1985 inserted by the Companies (Single Member Private Limited Companies) Regulations 1992, Limited Liability Companies have been able to operate with only one member.

Prior to that, a Company required at least two members to comply with the provisions of the Companies Act 1985, the breach of which could lead to personal liability for the Company's debts by the Member concerned under Section 24 Companies Act 1985.

Many Companies avoided this restriction by putting one share in the name of a nominee. Parliament realised that there was little benefit in requiring a Company to have at least two Members (if this provision could be circumvented by holding one share in the name of a nominee) and that such a provision was restrictive in encouraging businessmen and entrepreneurs to set up in business.

Accordingly, Section 352A of The Companies Act 1985 was introduced.

It is important to note that whilst it is now permissible for a Company to have only one Member, there are nevertheless certain rules and regulations which need to be complied with.

Register of Members
If a Private Company Limited by Shares (or by Guarantee) has only one Member, it is necessary for a Statement to be recorded in the Register of Members to that effect.

It is also necessary to record the date when the Company became a Company having only one Member. If this is from the date of incorporation, then the date of incorporation will be the relevant date.

If the membership of a Private Company Limited by Shares increases from one to two or more Members, it is necessary to make an entry in the Register of Members that the Company has ceased to have only one Member together with the date on which that event occurred.

In customary fashion, The Companies Act 1985 provides that if a Company makes default in complying with the relevant provisions set out above, the Company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.

In addition to the abovementioned provisions, it is also necessary for the Articles of Association to be amended to cater for Single Member Companies. This includes provisions that if and for so long as a Company has only one Member, one person entitled to vote upon the business to be transacted at a General Meeting shall constitute a quorum; that any sole Member of the Company shall be the Chairman of any General Meeting and that a proxy for a sole Member may vote on a show of hands.

Obligation to Keep and Enter up Register of Members
Every Company is required to keep a Register of Members and to enter in it particulars of the names and addresses of Members, the date on which a person was registered as a Member and the date at which any person ceased to be a Member.

If the Company has a Share Capital, the Register of Members must also state the Shares held by each Member, distinguishing each Share by its number and if there is more than one class of Shares, by its class; and details of the amount paid or agreed to be considered as paid on the Shares of each Member.

If a Company defaults in complying with these provisions, the Company and every officer of it who is in default is liable to a fine, and for continued contravention, to a daily default fine.

Location of Register
It is a requirement of the Companies Act for the Register of Members to be kept at its Registered Office address unless the work of making it up is done at another office in which case, it may be kept at the other office at which the work is done but it must not be kept, in the case of a Company registered in England and Wales, at any place other than in England & Wales. Every Company must notify the Registrar of the place where its Register of Members is kept, and of any change in that place, on the prescribed form.

If a Company makes default in complying with these provisions, the Company and every officer of it who is in default is liable to a fine and for continued contravention to a daily default fine.

Important Points to Remember

It is necessary for a statement to be recorded in the Register of Members if your Company is Limited by Shares or Guarantee and has only one Member.
Record the date that the Company became a Single Member Company.
Record if and when your Company ceases to be a Single Member Company.
You must amend the Articles of Association accordingly.
Keep a Register of Members with all their particulars.
State the shares held by each Member.
Keep it at the Registered office.
Notify the Registrar of the place at which it is kept, if not the Registered Office.