How Missouri Revised Statute 351.467 gives a deadlocked 50% shareholder a powerful legal exit
Two equal partners built a business together. Now they cannot agree on anything — and neither one can outvote the other. Missouri law has a specific, powerful remedy built exactly for this situation. Here is how it works.
The 50/50 Problem: When Equal Ownership Becomes a Trap
Splitting a company equally between two owners feels fair at the start. And for many business partnerships, it works for years. But when a 50/50 business relationship breaks down — through disagreement about the company’s direction, a breakdown in personal trust, competing visions for the future, or simply an unwillingness to continue working together — equal ownership can become a legal trap.
Neither shareholder can outvote the other. The board is deadlocked. The business may be paralyzed. And unlike a majority shareholder who can simply vote to dissolve the corporation, a 50% shareholder has no automatic power to end things unilaterally.
Or so most business owners assume. The reality is different. Missouri has a statute written specifically for this situation, and it gives either 50% shareholder a powerful legal tool to force resolution.
Missouri Revised Statute 351.467: The Plain-English Version
Missouri Revised Statute section 351.467 is titled ‘Filing for discontinuation of certain corporations — procedure.’ It applies specifically — and only — to Missouri corporations with exactly two shareholders, each owning 50% of the stock.
Here is what the statute actually says, in the language of the law:
If the stockholders of a corporation of this state, having only two shareholders each of which own fifty percent of the stock therein, shall be unable to agree upon the desirability of continuing the business of such corporation, either stockholder may file with the circuit court in which the principal place of business of such corporation is located a petition stating that it desires to discontinue the business of such corporation and to dispose of the assets used in such business in accordance with a plan to be agreed upon by both stockholders or that, if no such plan shall be agreed upon by both stockholders, the corporation be dissolved.
In plain English: if you own exactly 50% of a Missouri corporation and you and your co-owner cannot agree on whether to keep running the business, you have the legal right to go to court and ask for dissolution. You do not need your partner’s permission. You do not need a majority vote. You file a petition, propose a plan for distributing assets, and if the two of you cannot agree on a plan within the statutory timeframe, the court will dissolve the corporation for you.
This is one of the most significant legal protections available to equal business owners in Missouri — and one of the least understood.
The Exact Requirements to Use Section 351.467
The statute is narrow and precise. Before filing a petition, you need to confirm that all of these requirements are met:
- Your business must be organized as a Missouri corporation — not an LLC, not a partnership, not an S-Corp that was originally formed as an LLC. The entity must be a corporation formed under Missouri Chapter 351.
- There must be exactly two shareholders. The statute does not apply to corporations with three or more shareholders, even if two of them together own 50%.
- Each shareholder must own exactly 50% of the stock. A 51/49 split, even by a single share, disqualifies you from using this statute.
- There must be genuine disagreement about whether to continue the business. Courts interpret this broadly — it does not require the shareholders to be in active litigation with each other.
If all four of these conditions are met, either shareholder may use section 351.467, regardless of who ‘started’ the disagreement or who is ‘at fault.’
IMPORTANT CAVEAT: Even when all four requirements are met, section 351.467 may be unavailable if the shareholders previously entered into a shareholder agreement that addresses what happens when the relationship breaks down. Missouri courts have ruled that a properly drafted shareholder agreement — particularly one with a buy-out provision — can supersede the statute entirely. This is a critical planning point we will address later in this article.
What Happens After You File the Petition
Once a qualifying shareholder files a petition under section 351.467 in the circuit court where the corporation’s principal place of business is located, the statute sets a two-stage timeline for resolution:
STEP 1: The 90-Day Agreement Window
After the petition is filed, both shareholders have 90 days to file a certificate with the court stating that they have agreed on a plan for discontinuing the business and distributing the assets. The plan does not have to be the one that was originally attached to the petition — it can be a modified version that both parties negotiate. If a deal is reached within 90 days, the dissolution proceeds according to that agreed plan.
STEP 2: The 180-Day Completion Deadline
If the shareholders agree on a plan, they then have 180 days from the original filing date to file a second certificate confirming that the distribution called for in the plan has been completed. This is the practical finish line — it confirms the assets have been divided and the wind-down is complete.
STEP 3: Court-Ordered Dissolution
If both stockholders fail to file either of these certificates within the applicable timeframes — meaning no agreement on a plan, or no completion of an agreed plan — the court shall dissolve the corporation. The statute uses the word ‘shall,’ which means it is mandatory, not discretionary. The court will then appoint one or more trustees or receivers to administer and wind up the corporation’s affairs in a manner intended to maximize value for the shareholders, which may include selling the company as a going concern.
Both the 90-day and 180-day periods can be extended by written agreement of both shareholders, filed with the court before the applicable deadline expires.
What the Court-Appointed Receiver Does
If the matter reaches the point of court-ordered dissolution and receiver appointment, the receiver steps into the role of managing the wind-down. Their mandate is to realize the maximum value for shareholders. Depending on the nature and value of the business, this might mean:
- Selling the company as a going concern to a third-party buyer, which often preserves more value than liquidation
- Liquidating business assets — equipment, inventory, real estate, intellectual property — and distributing the proceeds
- Collecting outstanding receivables and satisfying outstanding liabilities before distributing net assets to shareholders
- Managing ongoing operations during the wind-down period to preserve value
The receiver is appointed by and accountable to the court, not to either shareholder. Their job is the business, not taking sides.
The Related Taxpayer Rule: A Critical Nuance
Section 351.467 includes a provision designed to prevent shareholders from gaming the statute through related-party transfers. If, within 90 days before a petition is filed, shares of the corporation are owned by or transferred to persons who would be considered related taxpayers under Section 267 of the Internal Revenue Code — for example, family members — those shares are treated as owned by one stockholder for purposes of the statute.
In practical terms: you cannot transfer half your shares to your spouse two months before filing in order to create the appearance of a two-shareholder 50/50 structure. The statute sees through those arrangements.
How This Is Different from Judicial Dissolution Under 351.494
Missouri also has a broader judicial dissolution statute, section 351.494, which allows courts to dissolve a corporation on grounds such as director deadlock, shareholder deadlock, illegal or fraudulent conduct by directors, or waste of corporate assets. Judicial dissolution under 351.494 requires proof of wrongdoing or dysfunction.
Section 351.467 is different and more powerful for equal shareholders because it does not require any showing of wrongdoing. It simply requires the two conditions: a 50/50 split and an inability to agree on continuing the business. No fraud, no waste, no bad faith — just disagreement. That is enough.
The Shareholder Agreement Exception: Why Pre-Planning Matters
Here is the strategic planning point that every 50/50 business owner needs to understand. Missouri courts have held that a properly drafted shareholder agreement can supersede section 351.467 entirely. Specifically, if the shareholder agreement includes a mechanism — such as a buy-sell provision or a mandatory buy-out procedure — that addresses what happens when shareholders cannot agree, a court may rule that the statutory dissolution procedure is unavailable because the parties already agreed to a different remedy.
This cuts both ways as a planning tool:
- If you want to protect the corporation from being dissolved by a disgruntled 50% shareholder, a well-crafted shareholder agreement with a buy-sell clause is your best defense. It gives the other shareholder an exit without destroying the business.
- If you are the shareholder who wants out, and the corporation has no shareholder agreement or an inadequate one, section 351.467 is your leverage. Filing a petition signals to the other party that you are serious, which often motivates negotiation.
The lesson for business owners forming a 50/50 corporation today: do not wait until things go wrong to address the exit question. A properly drafted shareholder agreement — negotiated when the relationship is good — is the best protection for both parties.
Practical Scenarios Where 351.467 Applies
Here are some real-world situations where this statute becomes relevant:
- Two co-founders built a company together and one wants to retire or move on, but the other refuses to negotiate a buyout at a fair price. The one who wants out files under 351.467, creating a forced resolution process.
- A family business with two siblings as equal owners reaches an impasse after a falling out. Neither will agree to a buyout. 351.467 gives either one the ability to initiate a structured dissolution rather than letting the conflict paralyze the business indefinitely.
- Two business partners have fundamentally different visions for the company’s future direction. One wants to grow aggressively, the other wants to stay small. They are deadlocked. Filing under 351.467 forces both to either reach a negotiated resolution or accept court-supervised wind-down.
- One 50% shareholder has stopped contributing to the business but is blocking the other from making key decisions or bringing in new partners. The active shareholder files under 351.467 to force a resolution.
What You Should Do If You Are in a 50/50 Deadlock
If you are currently in a deadlocked 50/50 corporation situation — or you are beginning to see the warning signs — here is the guidance Voytas Law consistently provides:
- Do not wait. Deadlocked business relationships do not usually improve on their own. The longer the impasse continues, the more value the business loses and the more entrenched both positions become.
- Get legal advice before taking any action. Filing under 351.467 is a significant legal step with irreversible consequences if not handled correctly. Understanding your rights and the full range of options — negotiated buyout, mediation, formal petition — is essential before you proceed.
- Review any existing shareholder agreement carefully. If one exists, it likely governs what happens next. If it does not address this situation, that gap itself creates strategic options.
- Preserve business records and financial documents. In any dispute involving business assets and their distribution, documentation of the company’s financial position is critical.
- Consider whether a negotiated solution is achievable. A court-supervised dissolution is a last resort, not a first move. Many 50/50 deadlocks are resolved through negotiation once both parties understand what section 351.467 means for their alternatives.
Voytas Law: Missouri Corporate Dissolution Experience Since 2002
Voytas Law has handled Missouri corporate dissolution cases — including matters involving section 351.467 — for over two decades. We understand both sides of these disputes: we have represented shareholders seeking dissolution and shareholders seeking to protect a business from being forced into dissolution.
That experience on both sides of the table gives us a practical, realistic perspective that pure theory cannot provide. We know how Missouri circuit courts approach these petitions, what arguments are effective, and how to assess whether a negotiated resolution is achievable before committing to litigation.
If you are a 50% shareholder in a Missouri corporation and you are facing a deadlocked business relationship, the worst thing you can do is nothing. The statute provides a path forward. Let us help you understand your options and decide on the right one for your situation.
LEGAL DISCLAIMER: This article is for educational purposes only and does not constitute legal advice. Every business situation is unique. Please consult with a qualified attorney before making legal decisions for your business.
READY TO TAKE THE NEXT STEP? Voytas Law has handled Missouri corporate dissolution cases under section 351.467 for over 20 years. If you are a 50% shareholder in a deadlocked Missouri corporation, call us today for a confidential consultation. We bring big-firm experience with the personal attention your situation deserves. Visit voytaslaw.com to schedule.
