What is a Deadlock in a New Jersey Business?
Deadlocks occur in New Jersey closely held corporations, partnerships and limited liability companies when there is disagreement among business partners. To effectively evaluate whether or not a deadlock exists and your rights as an equity owner, you must carefully review with your New Jersey business attorney all governing documents, such as shareholder, partner and member operating agreements.
Proceed with caution when you are considering and evaluating corporate deadlocks as deadlocks, typically, are claimed and exist just prior to a significant dispute with a business partner. Typically, a business partner who wants to claim corporate assets for himself or herself or who wants to establish a competing business, will claim a deadlock as justification for dissolution.
If you are claiming a corporate deadlock as a basis for dissolution, you should evaluate your options with an experienced business lawyer as your actions (i.e., seeking dissolution) may have unintended consequences that may benefit your business partner.
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