The core answer
A 50:50 company works while the owners agree. When they stop agreeing, the votes tie, nothing can be resolved, and the company often cannot sign contracts, pay salaries or deal with the bank. There is no single "deadlock button" in Thai law. The realistic routes are, in order of cost and speed: a negotiated interim arrangement, a buyout by one side, a court route, or a voluntary dissolution and liquidation.
The rule (Civil and Commercial Code). Directors are appointed and removed only by the general meeting (section 1151). Special resolutions need at least three quarters of the votes cast (section 1194), and voluntary dissolution needs one (section 1236(4)). A court may order a company dissolved only on the grounds in section 1237, including "any other cause that makes the company unable to continue" (item 5). Shareholders holding at least one fifth of the shares may require an extraordinary meeting (sections 1173 to 1174).
Our practical view. Fix the day-to-day paralysis first, in writing, before arguing about the end result. Protect records and cash without taking matters into your own hands. Then decide on a buyout or an orderly exit. Litigation should be the option you reach when talks fail, not the first letter.
If you are still setting up a 50:50 company, read multi-founder shareholding and minority shareholder rights instead. This guide assumes the dispute has already happened.
1. What breaks first when 50:50 owners stop agreeing?
Three things usually fail first.
- Signing. The company certificate lists which directors can bind the company and whether they sign jointly. If both must sign and they will not, contracts, cheques and filings stall.
- Meetings. An ordinary resolution needs more votes in favour than against. A tie fails. Section 1193 gives the chair a casting vote on a tie, but who chairs and whether the articles change this must be checked, and many founders will not accept a chair's vote on a dispute that is really about control.
- Money. Banks follow their account mandate. If both signatories must approve, payroll, rent and taxes can stop.
Unpaid salaries and missed tax or social security payments are the most urgent problem, because employees and agencies do not wait for the owners to settle. Check with your accountant and labour adviser what deadlines apply to your company.
2. What should we do in the first 30 days?
Use this order.
- Collect the documents. Articles of association, the latest company certificate and list of shareholders, shareholders' agreement, board and meeting minutes, share register, bank mandates and the last filed financial statements.
- Agree a standstill in writing. Even hostile partners can often agree on a narrow interim arrangement: who signs payroll and tax payments up to a set amount, who deals with the bank, and that neither will transfer assets or shares during the talks.
- Keep the books going. Section 1206 requires the directors to see that the company's accounts are complete and accurate. Keep the accountant paid and the filings on time.
- Preserve, do not seize. Make copies of what you are entitled to see. Do not remove the company seal, originals or laptops, change bank passwords or lock the other side out of premises. That behaviour can turn a company dispute into a criminal or civil claim against you.
- Get an independent view of value. You will need it for any buyout or exit.
3. Can a stalled meeting be called, and does it help?
Possibly, but in a pure 50:50 the numbers matter.
Sections 1173 and 1174 let shareholders holding at least one fifth of the shares ask the directors in writing to call an extraordinary meeting, stating the purpose. If the directors do not call it within the period the Code sets (30 days), the requesting shareholders may call it themselves. Notice rules are in section 1175, and a quorum is set by section 1178. Check the articles, which may add requirements.
The limitation is arithmetic. A meeting can pass a resolution to change directors only if one side wins the vote. If both sides hold exactly half, the meeting records the disagreement. It is still worth doing: it creates a record, it tests whether a casting vote applies, and it may show the other side that you will use the formal route. For the full mechanics of calling a meeting and challenging resolutions, see minority shareholder rights. If a shareholder or director is abroad, see holding meetings online.
4. Negotiation, mediation and arbitration
Most 50:50 disputes that end well end by agreement. A mediator can help owners who no longer speak. Check whether the shareholders' agreement or the articles already contain a dispute clause, because it may require negotiation or mediation before a court filing and may name arbitration instead of court. If so, ignoring it can cost you. We assist with this through our dispute resolution practice.
A written agreement should state who stays, who leaves, price, payment dates, what happens to guarantees and loans, and resignation of directors.
5. How does a buyout work?
A buyout is the usual outcome when one owner wants to continue the business.
What the law says. Under section 1129, shares can be transferred without the company's consent, unless the articles say otherwise for registered shares. A transfer of registered shares must be in writing, signed by seller and buyer, with at least one witness, and must state the share numbers. It cannot be used against the company or third parties until the new owner's name is recorded in the share register. Nothing in the Code lets one owner force the other to sell.
Valuation. The price is a negotiation. Typical bases are book value, a multiple of earnings, or a valuation by an independent accountant or valuer. A shoot-out clause (one owner names a price, the other chooses to buy or sell) works only if the shareholders' agreement contains it. Do not agree a price without the latest financial statements and a list of debts, guarantees and director loans.
Other points to settle.
- Release of the leaving owner from personal guarantees, leases and bank facilities, and repayment of any shareholder loan.
- Resignation of the leaving director and registration of the change (the Code requires registration of director changes within 14 days, section 1157).
- A non-compete and non-solicitation period that is reasonable in scope.
- Confidentiality and who owns client lists, domain names and trademarks. See brand and trademark ownership.
- Tax on the share sale and stamp duty: check with your accountant before signing.
If you are the buyer and the company has licences, read buying a company with due diligence for the diligence checklist. Our business sale and corporate secretarial teams can prepare the share transfer and registrations.
6. Can the court end the deadlock?
The rule. Section 1237 gives these grounds for a court to order dissolution of a limited company:
| Item | Ground |
|---|---|
| 1 | Error in filing the statutory report or holding the statutory meeting |
| 2 | Company did not start business within one year of registration, or stopped for a full year |
| 3 | Trading only at a loss, with no hope of recovery |
| 4 | Number of shareholders reduced to one |
| 5 | Any other cause making the company unable to continue |
Item 5 is the one deadlocked owners usually rely on. We opened the text of the section, but we did not open a Supreme Court decision that applies item 5 to a 50:50 deadlock, so we cannot tell you how a court will treat your facts. As a matter of principle, a conflict between owners or directors does not, on its own, fit one of the listed grounds; the question is whether the company can still operate.
Our practical view. A court case takes time and money, and the company often loses customers while it runs. It can still be the right choice where one side is acting in bad faith, the company cannot function at all and the other routes have failed. Use it with a realistic expectation, and without assuming the result.
Other court-based routes are explained in minority shareholder rights: challenging an irregular resolution and suing directors for the company.
7. Voluntary dissolution and liquidation
If the owners agree to end the business, the steps are as follows (DBD, Ministry of Commerce, and Code sections 1236, 1250 to 1257).
- Special resolution to dissolve. At least three quarters of the votes of shareholders present, at a meeting called with the notice the Code and articles require. In a 50:50 company, both sides must vote in favour.
- Liquidator. Unless the articles say otherwise, all directors are liquidators by law and must act together unless the meeting or a court sets different powers. The meeting can appoint someone else. If a liquidator is needed and none is available, a prosecutor or interested person can ask the court to appoint one (section 1251). A court can remove a liquidator on the petition of a shareholder group holding one twentieth of the capital (section 1257).
- Within 14 days of dissolution. The liquidator registers the dissolution with the registrar, publishes notice in a local newspaper at least once and sends registered mail to known creditors (sections 1253 and 1254).
- Liquidation. Prepare a balance sheet and have it audited, collect receivables, sell assets, pay debts, then return capital and surplus to shareholders. If the assets cannot cover debts, the liquidator must ask the court to declare the company bankrupt (section 1266). See when a company cannot pay its debts.
- Registration of completion. Files after the final meeting approves the report. Lawsuits about debts owed to or by the company must be brought within two years of completion.
If the owners agree to close, we can handle it through company closure.
8. Which route fits which situation?
| Situation | Usual route |
|---|---|
| Both want out, no buyer | Voluntary dissolution and liquidation |
| One wants to carry on, the other will sell | Buyout by agreement, with valuation |
| Neither will move, company still trading | Mediation, then interim arrangement, then court if needed |
| Company cannot operate and the other owner is acting in bad faith | Legal advice on court dissolution (section 1237(5)) and other remedies |
| Company is insolvent | Insolvency route first, not a buyout |
9. Checklist
- Articles, certificate, shareholder list, minutes and bank mandates collected
- Payroll, tax and social security up to date or covered by a written interim arrangement
- Written standstill: no asset or share transfers during talks
- Copies of records made lawfully; nothing removed by force
- Independent valuation requested
- Dispute clause in shareholders' agreement and articles checked
- Board and shareholder meetings called according to the articles
- Decision made: buyout, mediation, dissolution or court
- Release of personal guarantees and registration of director changes planned
Further reading
- Multi-founder shareholding decisions
- Minority shareholder rights in a Thai company
- Holding meetings online
- When a Thai company can no longer pay its debts
- Changing directors, capital or address after registration
A 50:50 deadlock is best handled in this order: keep the company compliant and solvent, protect records without seizing them, then choose between a buyout, mediation, dissolution or the court.
We advise owners on shareholder disputes, buyouts, share transfers and company closure. Initial consultation is free — call +66 92 254 2045 or send us the details. See also legal retainer, corporate secretarial, company closure, business sale, business law and dispute resolution.
This guide is published by Suwanvara Law Firm — a Khon Kaen law firm established in 1986. General information only, not legal advice on a specific matter.
