There are two shareholders.

One shareholder wants to undertake an initial public offering (IPO) and listing of the company, while the other doesn’t.

Without the right legal structure, this kind of disagreement can slow down the company or create a fallout between shareholders.

The following are two practical legal tools I use with founders and investors to prevent this kind of deadlock:

1. Call Option with Pre-Agreed Valuation

Give one shareholder (typically the one with deeper pockets) the right to buy out the other if they cannot agree on a major strategic move.

The call option can be exercised upon occurrence of a specific event, e.g. a blocked IPO. The exercise price may be based upon pre-agreed valuation or valuation method.

It allows one party to move forward while avoiding prolonged disputes.

2. Pre-Agreed Exit Triggers

Include a clause in the shareholders’ agreement to undertake an IPO once certain milestones are met (e.g., $X million in revenue or net profit).

This sets expectations early and avoids deadlocks later.

These are the kinds of solutions I work on when helping investors and companies design shareholder structures built for growth and exit.

If you’re thinking about shareholder terms or preparing for an eventual exit, it’s worth thinking through the exit mechanisms early.

#malaysiancorporatelawyer

This post was first posted on LinkedIn on 24 July 2025.