Article · 12 min read

How to Resolve Deadlock in 50/50 Co-Founder Situations

SPZ Legal Free Beginner

This is the explainer written for exactly your situation: two founders, 50/50, no tiebreaker. It lays out the full menu you can put in your shareholders agreement before you need it, from a neutral third party who casts the tie-breaking vote, to a mediation step, to the buy-sell endgame, and names each shotgun variant (Russian Roulette, Texas Shoot Out, adjusted fair market value at a 125% buy or 75% sell) so you can pick one deliberately instead of discovering you have none.

  • Bake the deadlock mechanism into the agreement while you still get along; retrofitting one mid-fight is nearly impossible
  • A neutral third party who casts a tie-breaking vote keeps ownership 50/50 while ending the paralysis
  • Shotgun clauses come in flavors (Russian Roulette, Texas Shoot Out, premium/discount buyout) and you choose the one that fits your cash reality
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The question it answers

  1. How do we handle deadlock when two co-founders own 50/50 and cannot agree on a major decision?

Read with it

  1. This is the worked mechanics of the buy-sell clause in Indian shareholders-agreement language, not a generic Western template.... Mondaq India Article · 10 min read Deadlock Resolution Mechanism in Joint Venture Agreements Mondaq (Indian corporate counsel)
  2. The cleanest case for the answer's core move: appoint a chairman who holds a casting vote so an even split can still produce a... South Bank Legal Article · 9 min read 50/50 Shareholder Deadlock: Avoiding and Resolving Disputes South Bank Legal
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