Two equal shareholders in a Czech company: what happens when they disagree?
One owner wants to reinvest profits in equipment. The other wants to distribute some of the money. Each holds half of a Czech limited liability company, an s.r.o. Whether the company can act depends on voting rights, the articles of association and which body has authority to decide.
Find the point at which a decision gets stuck
Check the votes attached to each interest, the quorum and the majority required for the decision. The Czech default for ordinary resolutions is a majority of votes cast by shareholders present, subject to the applicable quorum. The articles can change the default rules, and certain resolutions require a higher threshold. A 50:50 ownership split alone tells you little about how a particular vote will play out.
Check the rules for managing directors separately. If two directors must sign jointly, an ordinary supplier contract can get stuck even when no shareholder resolution is required.
Agree how the company will operate during a disagreement
Identify the decisions that should require both owners' consent. Then agree how payroll, invoices and other routine commitments will be handled in the meantime. For recurring disagreements, set a timetable for exchanging written proposals and reviewing the same information. Depending on the issue, a mediator or an independent specialist can help the owners move forward.
Work out how a buyout would actually be paid for
An exit clause needs a valuation method, payment terms and a buyer who can fund the purchase. Check transfer restrictions in the articles. If the departing shareholder guaranteed a company loan, agree how to address that guarantee with the lender. A transfer of the shares does not itself release the guarantor.
Czech Business Corporations Act, sections 169–171 and 207–209