Is Your Company Stuck in a 50/50 Deadlock? Legal Solutions When a Business Cannot Move Forward

Setting up a Limited Company usually starts with an exciting business project. But when partners begin to disagree about the direction of the business, the relationship can quickly break down.

When shareholders are in conflict, the real danger is that the company becomes legally blocked. This often happens when the shares are split 50/50, or when the required majority cannot be reached. In that situation, the company may become paralysed and, in the worst case, may end up being closed down.

When shareholders are in conflict, the real danger is that the company becomes legally blocked. This often happens when the shares are split 50/50, or when the required majority cannot be reached. In that situation, the company may become paralysed and, in the worst case, may end up being closed down.

Legal ways to resolve the deadlock

Legal ways to resolve the deadlock

  • Shareholders’ Agreement: If there is a shareholders’ agreement, it may include deadlock clauses or buy-sell mechanisms. These clauses can force one party to buy or sell their shares at an agreed price or under a specific valuation method.
  • Right to Leave the Company: If the majority repeatedly refuses to distribute dividends despite the company making profits, the affected shareholder may have the right to leave the company and claim the real value of their shares.
  • Removal of the Director: If the managing shareholder is acting unfairly, abusing their position, or damaging the company, legal action may be taken to remove them and claim compensation for losses.
  • Orderly Dissolution or Sale: In many cases, the best solution is to negotiate a fair valuation agreement so that one party buys 100% of the business, or the company is dissolved in an orderly way.

Find the best Legal Advice with Carr & Associates Law Firm

Trying to solve a shareholder dispute informally can weaken your legal position.

At Carr & Assiciated Law Firm we provide specialised, clear and effective business law advice 100% online.

We review your company’s articles of association, identify the legal tools available to resolve the deadlock, and act on your behalf in negotiations with the other shareholder. We can prepare buy-sell agreements, settlement agreements or agreed dissolutions.

If an amicable solution is not possible, we defend your interests through the appropriate court action.


Take control of the situation


A long-term deadlock can seriously damage your company.

Book an online consultation today and take the first step towards a clear solution.


info@despachocarrion.com

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