A business deadlock occurs when shareholders or directors cannot obtain the vote or agreement required for an important decision, causing governance or operations to stall.
Common causes
- 50/50 ownership
- equal board control
- unanimous reserved matters
- funding disputes
- executive appointments
- dividends
- major asset sales
Possible solutions
- escalation
- mediation
- casting-vote mechanisms
- buy-sell procedures
- valuation mechanisms
- one shareholder buying the other out
- agreed dissolution triggers
- arbitration for defined disputes
Without a deadlock clause, the parties must rely on company law, constitutional documents, negotiation and available judicial remedies.