113 The need for deadlock provisions

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BUSINESSES vol 4(2) start-up, sale and purchase

113 The need for deadlock provisions

Copyright © 2025 LexisNexis

| Commentary

(f) Deadlock provisions

However much the shareholders in a company may share the same vision at the outset of a new business, the possibility of subsequent deadlock may subsequently arise. In some cases, this arises from differing views about the advantages and disadvantages of a specific major commercial decision. Should the business expand into a new area? Should the company invest in specific new premises?

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(1) START-UP

114 The aim of deadlock provisions

115.1 When the deadlock provisions are to apply

115.2 Third-party references

115.3 Escalation clauses

115.4 Russian roulette

115.5 Winding up of the company

116 Damages, specific performance and injunctions

117 Termination of the shareholders’ agreement for breach etc

118 Dispute resolution

119 The need for restrictions on transfer

120.1 The transfer notice

120.2 Valuation of the shares

120.3 Notification and offers

120.4 Completion

121 Location of pre-emption procedures

122.1 Possible clauses in a shareholders’ agreement

122.2 General principles relating to restrictive covenants

122.3 Application to shareholders’ agreements

123 Termination of the business

124 Winding up of the company