What Can We Do If Our 50–50 Limited Liability Company Is Deadlocked?

Company Dissolution and Liquidation

Prepared by: Constantinople

Disagreement between two equal shareholders does not automatically invalidate all company transactions. First, the decisions that cannot be made and the current manager's powers are identified. A halt in banking transactions, inability to appoint a necessary manager and disagreement only over profit sharing are different problems. The solution should be selected according to the deadlock's commercial effects.

Prepare the articles of association, current representation record, meeting notices and minutes of unsuccessful resolutions. Share any separate agreement signed between the shareholders. Unpaid debts, approaching contractual dates or mandatory employee-related procedures may create urgency. Building a chronology that separates personal disagreements from events actually disrupting company operations helps identify the appropriate claim.

Dissolution of a limited liability company for just cause may be sought, but dissolution is not the only possible outcome. The court may instead order expulsion in return for an exit payment or another appropriate solution. If a manager has committed a breach, restriction of their authority is assessed separately. It is incorrect to assume that every disagreement will lead directly to appointment of a trustee to manage the company or closure of the business.

Show the decisions that cannot be made and their specific effects on company operations with supporting documents. Protection needed to keep the business operating is assessed separately from permanent exit and dissolution options.

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