What happens when 50:50 shareholders are deadlocked?

If the shareholders' agreement has a deadlock mechanism, it should be followed. If not, the parties may negotiate, mediate or seek relief from the court. Prevention through a good agreement is far cheaper.

Can a shareholder be forced to sell their shares?

Only where the articles, shareholders' agreement or a court order provides for it — for example through drag-along rights, leaver provisions or a buy-out order in unfair prejudice proceedings.

Should shareholder disputes go to arbitration?

If the shareholders' agreement contains an arbitration clause, many disputes between the parties will go to arbitration. Some statutory remedies may still involve the court, so specific advice is needed.

Shareholder Dispute Lawyer Kenya

Shareholder Dispute Lawyers in Kenya

When shareholders fall out, the business itself is at risk. Decisions stall, staff and customers notice, and value can drain away while the owners argue.

We advise shareholders, directors and companies on resolving disputes over control, management and exits — through negotiation and mediation where possible, and through the courts or arbitration where necessary.

When you may need advice

You are a minority shareholder being excluded from management or information.

Two equal shareholders are deadlocked and the company cannot make decisions.

A co-founder or family member wants to exit and the parties cannot agree on value.

You believe directors are running the company in their own interests.

Remedies under Kenyan company law

The Companies Act 2015 gives members ways to protect themselves. A member may petition the court where the company's affairs are being conducted in a manner that is unfairly prejudicial to members' interests, and the court can make a range of orders — including requiring one party to buy out another. In some circumstances, a member can bring a derivative claim on behalf of the company against directors for breach of duty.

The shareholders' agreement and articles of association are usually the starting point: they may set out deadlock procedures, transfer rights, valuation methods or an arbitration clause that determines where the dispute is heard.

Resolving disputes proportionately

Litigation between shareholders is expensive and public, and it can damage the business. We assess the legal position early and look for the most effective route — negotiated exit, structured buy-out, mediation, arbitration or court proceedings — while protecting your rights in the meantime.

Common risks and mistakes

Acting without first checking the articles and shareholders' agreement.
Removing directors or issuing shares without following proper procedure.
Waiting too long, allowing the other side to change the company's position.
Treating a shareholder dispute purely as a court battle when a negotiated exit would preserve more value.

Who should seek counsel

Minority and majority shareholders
Co-founders and family business owners
Directors facing allegations of breach of duty
Companies managing a dispute between their owners

How we work

1Document reviewWe review the articles, agreements, minutes and filings to establish your rights.
2StrategyWe advise on options, from negotiated exit to formal proceedings.
3Negotiation or mediationWe seek a commercial resolution where it serves your interests.
4ProceedingsWhere needed, we pursue or defend court or arbitration proceedings.

Advocates for this matter

Frequently asked questions

Depending on the facts, a minority shareholder may rely on rights in the shareholders' agreement and articles, petition the court for relief from unfairly prejudicial conduct under the Companies Act 2015, or in some cases bring a derivative claim on behalf of the company.

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This page gives general information about Kenyan law and is not legal advice for your situation. Contacting us does not create an advocate–client relationship. Last reviewed 8 Oct 2026.