Use this fact situation to answer the related questions that follow. A and B are the shareholders of a private Ontario company and each holds 50 percent of the issued common shares.There is no shareholder agreement.At a general meeting,A and B,who have had a falling out,cannot agree on anything,from the business of the company in the next year to the election of the directors and appointment of the officers.
In this situation,

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Since A and B are unable to agree on anything, the company is effectively deadlocked as both shareholders have equal voting power and neither can make a majority decision without the other's agreement. Without a shareholder agreement in place, there is no provision for how to resolve a deadlock situation. This can lead to significant legal and financial troubles for the company, such as inability to make decisions, financial loss, and even dissolution. The parties may have to seek legal advice or engage in mediation or arbitration to resolve the deadlock before it affects the operations and future of the company.

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