In an S-Corporation where there are 4 equal owners, in a voting situation where there is a 2-2 tie, how or who breaks the tie?

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In an S-Corporation where there are 4 equal owners, in a voting situation where there is a 2-2 tie, how or who breaks the tie?

Asked on May 14, 2012 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If each owner owns an equal share of the business, then there is no way to break a 2-2 tie--or rather the law does not provide a mechanism for how to do this, though it could be easily provided for by agreement. (I.e. there could be an agreement among the owners that in the event of a tie, "Bob"--who also is the company president or general manager--casts the deciding vote.) If the owners did not in advance provide for some tie-breaking mechanism, they will need to negotiaite or compromise among themselves to resolve the impass.


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