Because either 50% owner can petition to dissolve, either one can also be put to the choice of buying the other out. A deadlock that looks like a permanent trap is often the very fact that unlocks a buyout or a clean sale.
If you’re heading into a deadlock, the worst thing to do is wait while the company’s value erodes. We help Southern California co-owners assess their leverage, protect the business in the meantime, and move decisively toward a buyout, a sale, or a dissolution — from Orange County and Los Angeles to San Diego and the Inland Empire.
A deadlocked owner can petition the court for dissolution under section 17707.03 (LLC) or section 1800 (corporation). That typically forces a resolution: one owner buys the other out, the company is sold, or the court winds it up.
Yes. Because a 50% owner can petition for dissolution, the other owner is often put to the choice of buying them out at a court-supervised value to keep the business, which is itself a forced buyout outcome.
California recognizes deadlock as a ground for dissolution — for LLCs when it’s not reasonably practicable to carry on the business, and for corporations through the director-deadlock and shareholder-dissension grounds in section 1800.
Often the timing and sequence of filings affect who controls the outcome, including when a statutory buyout locks in. Getting early, experienced advice before anyone files can be decisive in an evenly split company.