Quick answer: Only if the company’s articles, a valid board resolution, delegated authority and applicable law permit that specific act. Check the governing documents before changing access, transferring assets, dismissing staff or instructing a bank.
First hours: preserve records and maintain essential operations
Save the current articles, shareholders’ agreement, register of members, board minutes, resolutions, bank mandates, contracts, accounting records and relevant messages. Preserve originals and metadata; do not delete chats or rewrite minutes. Record a factual chronology of the decision in dispute, proposals made and immediate deadlines. Maintain payroll, safety, customer service and other essential obligations.
Check who has authority to do what
Read the articles and any shareholders’ agreement for quorum, voting thresholds, reserved matters, chair’s casting vote, director appointment/removal, transfer restrictions and dispute steps. Compare the documents with current BRS records and valid board resolutions. Do not assume an equal share split means every act needs both signatures or that one side can act unilaterally; authority is document- and fact-specific.
Avoid actions that make the dispute harder to fix
Do not transfer company assets, change bank signatories, destroy records, divert customers, issue new shares or alter access as leverage without legal authority and documented advice. Directors owe statutory duties to the company. Keep business and personal funds separate and disclose conflicts through the proper process.
Use a structured escalation
Send a short, neutral notice identifying the deadlocked decision, the governing clause and a proposed meeting or mediation date. Circulate the same accurate documents to all relevant decision-makers. Consider an interim standstill on irreversible steps while cash flow, safety and legal deadlines continue to be managed.
Prepare realistic resolution options
Depending on the agreement and company position, options may include an independent expert decision on a narrow issue, mediation, a negotiated buyout, revised reserved matters, a board change under the articles, or court relief. Value, funding, tax, employee impact and third-party contracts may affect which option is workable.
By the end of 48 hours
Have a preserved record set, current cash and obligation snapshot, written list of urgent risks, clear authority map, dated chronology and proposed next meeting or neutral process. This is a practical triage window, not a legal deadline. For threats to assets, data, safety or solvency, obtain urgent advice rather than waiting for the window to expire.
Questions people ask
Can one director act alone during a shareholder deadlock?
Only if the company’s articles, a valid board resolution, delegated authority and applicable law permit that specific act. Check the governing documents before changing access, transferring assets, dismissing staff or instructing a bank.
Can I lock the other shareholder out of the business?
Do not assume you can. Restricting access without authority may breach duties or agreements and can escalate the dispute. Preserve evidence and get advice on immediate safeguards.
What if the company cannot make a decision?
Use the escalation, mediation, buyout or deadlock mechanism in the articles or shareholders’ agreement if one exists. If not, obtain advice on negotiation, court remedies, governance and possible exit options.
Official sources and scope
For the current rule and any forms or rates, check the official sources: Companies Act 2015 · Business Registration Service. This guide is general information, not advice on a particular transaction or dispute. Laws, regulations and administrative requirements can change; check the position that applies to your facts before acting.
Related guidance
CS Advocates LLP governance advisory practice. Related reading: Shareholding structures and director duties · Changing company directors in Kenya · Mediation in Kenya.
This is general information, not legal advice on a particular matter, and does not create an advocate-client relationship. For advice on your specific situation, contact CS Advocates LLP for a confidential, conflict-checked consultation.