We draft a shareholders’ agreement for two equal owners for a fixed £1,250 +VAT. It sets out how a tie between you gets broken, because with 50% each either of you can block any decision.
Most companies run on the standard articles of association that Companies House supplies, written for companies of every shape. With two owners on 50% each and two directors, those articles leave every decision needing both of you.
That works while the two of you agree. When you disagree, the same rules mean neither of you can move the business forward, and neither can make the other leave.
As an illustration, two friends set up a joinery company and take 50 shares each. Four years in, one wants to take a second van on finance and hire an apprentice. The other wants the profit paid out as dividends. Every board vote ties, and neither of them chairs the board. The van is not bought, no dividend is declared, and the accounts are signed late because they cannot agree the figures.
A deadlock clause agreed in year one would have set out the next steps: a meeting on a set date, then mediation, then the buy-sell route they had agreed. Without one, their choices are to negotiate, or to ask a court.
The agreement sets the steps in order, so a disagreement moves forward without either of you having to give in on the day. Most 50/50 agreements use two or three of these.
Either owner can call a deadlock in writing. You then meet within a set number of days, with the question written down, before anything else happens.
A mediator you both accept helps you reach an answer. It is confidential, and the two of you make the decision.
A chair, or a named third person, decides a defined list of questions, such as spending above a set figure. The larger decisions stay with the two of you.
One owner names a price per share. The other chooses whether to buy at that price or sell at it, so the price has to be fair to both.
As the last step, the company is sold or wound up on terms set in the agreement.
A company with no deadlock clause still has three routes out. Each costs more, and each depends on the other owner or on a court.
One of you buys the other out at a price you agree. Neither of you can be made to sell, and the price is whatever you can agree.
A shareholder asks the court for relief under section 994 of the Companies Act 2006, often an order that the other buys their shares.
A court can wind a company up where it thinks it just and equitable to do so, under section 122(1)(g) of the Insolvency Act 1986, and the business closes.
Court petitions are reserved work and go to AD Solicitors (SRA no. 8011228). Work carried out by AD Solicitors carries the full SRA framework, including the compensation fund and the Legal Ombudsman. Work we carry out ourselves does not.
Two founders on 50% each is an ordinary ownership structure, so it is priced at the starting figure. Subscribers pay from £1,125 +VAT.
Tax advice on share structures, a formal valuation and advice to each of you as individuals are priced separately. We act for the company, so each of you should take your own advice before signing. The full scope is on the shareholder agreement service.
Get my fixed price →Not alone. A director is removed by ordinary resolution under section 168 of the Companies Act 2006, and an ordinary resolution needs more than half the votes cast. With 50% each, neither owner can pass one. A shareholders’ agreement can set out what happens instead, for example that a director who stops working in the business is treated as a leaver and their shares are offered to the other owner.
Under model article 13 the director chairing a board meeting has a casting vote when the votes are equal. It only works if the directors have appointed a chair under article 12, and with two directors that appointment is a board decision that can itself tie. At shareholder level an ordinary resolution needs more than half the votes, so 50% cannot pass one. The agreement decides whether anyone has a casting vote, on which matters, and who.
A fixed £1,250 +VAT, agreed in writing before work starts, or from £1,125 +VAT for subscribers. Two founders on 50% each is an ordinary structure and sits at the starting price. More than one class of share, an outside investor, or owners who have not yet agreed the terms make it a bigger job, and you get the figure before anything starts.
A shareholders’ agreement is written while the owners still agree. Once a dispute has started, each of you needs advice of your own, and anything heading for a court goes to AD Solicitors (SRA no. 8011228). We can get the file in order first: the chronology, the documents and what each of you holds.
It moves the decisions to one owner. At 51% one owner can pass ordinary resolutions alone, including removing the other as a director, and the 49% owner keeps a block on special resolutions, which need 75%. Plenty of companies stay at 50/50 and use a deadlock clause. The split is a choice for the two of you, and the agreement is written to match it.
Who owns the shares, what the company does and anything you have already agreed. You get back a fixed price against a written scope before any work starts. See the privacy policy for how we use your details.
A fixed £1,250 +VAT, agreed in writing before work starts.
