Alannis and Jake each hold 50 percent of the shares in JagCorp, a limousine rental business.All management decisions since incorporation have been agreed to by both of them.Now they find that they cannot agree on how the corporation should be operated.Alannis wants the corporation to give up the limousine rental business and become an Avis rent-a-car franchisee.Jake wants to continue with the existing business as it is.They have been battling for six months but are deadlocked.In these circumstances, Alannis could get a court to order that the corporation be wound up.

Question

Quizplus · Accepted Answer

When shareholders are deadlocked and cannot agree on the operation of the corporation, and it's clear that they cannot break the deadlock on their own, one of the shareholders can petition the court for a judicial dissolution of the corporation. This is seen as a last resort when the shareholders' disagreement is irreconcilable and it's harming the business.

Alannis and Jake Each Hold 50 Percent of the Shares