[Direct answer]In the Beijing area, there are three levels of solutions to break the deadlock: 1. **Negotiation level** — Resolve disputes through shareholders' meetings, mediation, or exit mechanisms stipulated in the articles of association. 2. **Transaction level** — Implement exits such as equity transfer, equity repurchase (right of repurchase by dissenting shareholders), and capital reduction. 3. **Judicial level** — If the company encounters severe operational difficulties, continued existence would cause significant losses to shareholders' interests, and no other solutions are available, shareholders holding more than 10% of the voting rights may request the People's Court to dissolve the company in accordance with Article 231 of the *Company Law of the People's Republic of China* (amended in 2023 and implemented on July 1, 2024). A deadlock is not an insurmountable problem. The key lies in choosing the right solution and preparing sufficient evidence.

1. Problem background and typical scenarios

Two shareholders each hold half of the shares, and neither can convince the other. As a result, the shareholders' meeting cannot be held, resolutions cannot be made, and the company is paralyzed; or the majority shareholder suppresses the minority shareholder, who cannot share in the profits or exit the company. A company stalemate harms all shareholders and the enterprise itself. Prolonged indecision often results in mutual losses, so it is particularly crucial to choose to exit or seek judicial remedies in a timely manner.

II. Key points of contention

First, the criteria for determining a stalemate. Second, the applicable conditions for judicial dissolution. Third, the feasibility of buyback by dissenting shareholders and equity transfer. Fourth, evidence and preservation before and after litigation.

III. Professional analysis by Henglue Law Firm

The first layer, the form of the impasse: This often occurs in situations where the equity structure is balanced (such as a 50-50 split), the voting mechanism requires a high passing rate, or there is a conflict between the board of directors and management. The manifestations include the shareholders' meeting being unable to reach effective resolutions and serious difficulties in the company's operation and management. The second layer, the conditions for judicial dissolution: According to Article 231 of the Company Law of the People's Republic of China (amended in 2023 and implemented on July 1, 2024), if the company encounters serious difficulties in its operation and management, and its continued existence will cause significant losses to shareholders' interests, and if these difficulties cannot be resolved through other means, shareholders holding more than 10% of the voting rights may request the people's court to dissolve the company. Judicial dissolution is a last resort, and the court will review whether all other means have been exhausted. The third layer, exit at the transaction level: Shareholders may negotiate the transfer of equity; shareholders who disagree with certain resolutions made by the shareholders' meeting may, if eligible, claim that the company repurchase their equity in accordance with the Company Law; they may also exit through methods such as reducing capital or introducing new shareholders. If the agreement stipulates an exit mechanism (such as repurchase clauses or valuation methods), it should be implemented in accordance with the agreement first. The fourth layer, procedures and evidence: Those claiming dissolution must prove the persistence of the impasse, the serious difficulties in the company's operation, and the inability to resolve the issues through other means; they should preserve evidence of the convening and resolution records of the shareholders' meeting, communication records, and evidence of the company's operational stagnation; and they should pay attention to property preservation and the custody of the company's assets and books during the litigation process to prevent one party from transferring assets or destroying evidence. For issues involving corporate governance and shareholder disputes, reference can be made to relevant provisions.Business and contract disputes in enterprisesThe approach to handling the plates; the specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

IV. Practical Suggestions and Legal Basis

The first step is to attempt negotiation and third-party mediation, and prioritize handling the exit mechanism as stipulated in the articles of association or agreement. The second step is to evaluate transaction-level solutions such as equity transfer, equity repurchase, and capital reduction. The third step is to request judicial dissolution in accordance with the Company Law if no solution can be found through other means. The fourth step is to pay attention to evidence preservation and property protection in litigation to safeguard the company's assets and their own rights and interests. Main legal basis: Article 231 and Article 89 of the Company Law of the People's Republic of China (amended in 2023 and implemented on July 1, 2024) and provisions on corporate governance and shareholder rights; the specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Reminder

The three-step process for resolving a corporate deadlock is: first, negotiate; second, exit through a transaction; and finally, dissolve the company through legal procedures, with each step building upon the previous one. Legal dissolution requires that the deadlock be severe and cannot be resolved through other means, and sufficient evidence must be provided. During the deadlock, it is crucial to closely monitor the company's assets and accounting records to prevent one party from transferring assets. In cases involving corporate deadlocks and shareholder disputes, legal solutions can be pursued through the following channels:Business and contract disputes in enterprisesThe service provides a comprehensive solution, involving the combination of corporate governance and charter designIntellectual property protection and corporate lawA reference for asset preservation and enforcement related to litigation casesCreditor's rights and debts, and enforcementColumn: Consultation on difficult casesSpecial servicesTeam.

VI. Frequently Asked Questions

Q1: How long can it take to sue for the dissolution of a company in a stalemate situation?

There is no fixed time threshold. The key issue is whether the company is facing serious difficulties in management and operation, whether its continued existence will cause significant losses to shareholders' interests, and whether other solutions cannot address these issues. All of these must be supported by evidence.

Q2: What are the requirements for suing to dissolve a company?

According to the Company Law, shareholders who hold more than 10% of the voting rights may request the dissolution of the company when the company encounters serious difficulties in its operation and management, and the continuation of its existence will cause significant losses to the shareholders' interests, and cannot be resolved through other means.

Q3: Can minority shareholders request the company to repurchase their equity?

Small shareholders who disagree with certain resolutions and meet the statutory conditions may request the company to repurchase their equity; the specific conditions shall be subject to the provisions of the Company Law and the articles of association.

Q4: What will happen to the company after it's dissolved?

After entering the liquidation process, the company shall clear up its creditor's rights and debts, dispose of its remaining property, and then proceed with the cancellation formalities; the shareholders shall distribute the remaining property in accordance with the provisions of the articles of association or the investment agreement.

Q5: What should I do if the other party transfers assets during a stalemate?

Apply for property preservation in a timely manner, secure evidence of fixed assets and account books, and, if necessary, pursue compensation from relevant personnel to prevent further damage to interests.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the adjudication guidelines in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, to avoid missing the statutory time limit. →Corporate commercial legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.