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FAQs

A friend and I are 50/50 shareholders in a company. We cannot agree on how to run the company. I want to sell the company and its assets, but my friend does not. What can I do?

If there is a shareholder agreement, it likely provides direction as to how the shareholders can resolve the differences between them–often by having one of the business partners leave the company–while retaining value in the company. Even without a shareholder agreement, it may be possible for you to negotiate the sale of your interest to your business partner. If no resolution is likely, you may have to resort to some sort of court application. In certain circumstances, a shareholder may bring a court application seeking an order to wind-up the corporation. The court may order that a corporation be wound up in number of circumstances including where it is “just and equitable to do so”. Just and equitable grounds have included situations where the affairs of the corporation are deadlocked as a result of internal disagreement between two shareholders and the corporation can no longer carry on its commercial activity. Often, when a winding-up application is launched, it motivates the shareholders to agree that one buys out the interests of the other or that the company will be sold as a going concern to a third party in order to maximize value to the current shareholders.

© 2015 Lawrence, Lawrence, Stevenson LLP

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Telephone: 905.451.3040 Fax: 905.451.5058 Email: lls@lawrences.com

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