Partners and Disagreements: How to resolve a stalemate before it threatens the operation of the company.
At the beginning of most successful companies stand two friends, a shared vision, and immense enthusiasm. At that moment, it seems perfectly natural to split shares equally—50/50. It feels fair, like a true partnership, and no one imagines it could ever be any other way.
But the company grows. Enthusiasm turns into routine, vision becomes daily business, and turnover climbs from millions to tens of millions. It is precisely at the moment when the company is doing well and there is "skin in the game" that the first cracks in the partners' opinions often appear.
What happens when two owners with equal voting power cannot agree? A deadlock occurs. A stalemate. And for a functioning company, this can be fatal.
The 50/50 Problem An equal split of shares looks fair on paper, but in practice, it is a ticking time bomb. All it takes is one fundamental question on which you disagree:
One wants to reinvest profit into a new warehouse; the other wants to pay out dividends to build a house.
One wants to expand abroad; the other fears the risk.
One wants to sell the company to an investor; the other wants to build it for their children.
If you have a standard setup according to the law in your founding documents, a 50/50 disagreement means only one thing: the company stops. You cannot approve financial statements, you cannot appoint a managing director, you cannot make a decision. Banks take notice, suppliers become nervous, and the value of the company you built for years begins to drop.
A solution exists, but you must adopt it in time Many business owners hesitate to address "crisis scenarios" while relationships are still good. They consider it a sign of distrust. At Svoboda Koubková, we see it exactly the opposite way: a high-quality Shareholders' Agreement (SHA) is the ultimate expression of professionalism and responsibility toward the company.
Negotiating the rules of a breakup or dispute resolution when the partners are already not speaking to each other is too late, too expensive, and often impossible.
What should the agreement address? It's not about writing stacks of paper that no one will read. It’s about setting up mechanisms for key situations:
Breaking the Deadlock: You pre-determine the rules for proceeding in case of disagreement. This could involve inviting an independent mediator or using mechanisms like "Russian Roulette" or "Texas Shootout," which allow for one partner to fairly buy out the other. It sounds harsh, but it provides certainty that the company will continue under one leadership.
Work Involvement vs. Ownership: It often happens that one partner works 12 hours a day while the other is a passive investor. The agreement can fairly adjust remuneration for performance, independent of the share of profit.
Rules for Sale and Investor Entry: What if one person wants to sell their share to a third party? Do you want the right to veto it? Or the right to join the sale under the same conditions (Tag-Along)? Or conversely, the right to force a minority partner to sell if a buyer for the entire company comes along (Drag-Along)?
Peace in times of peace Law and business are closely linked. Just as you insure your company’s property against fire, you should insure its ability to act against disagreements between owners.
The goal is not to imagine the worst. The goal is to have a document in the drawer that clearly says: "If we don't agree, we proceed like this." Thanks to this, you won't have to litigate, the company won't be paralyzed, and you will have a clear head for what matters—the management and development of your business.
Do you feel that your articles of association no longer match the size of your company? We would be happy to help you set up relationships that will last into the future.