Your co-director wants liquidation. You want to keep going.

Start with the written rules

When one director wants the company wound up and the other wants to keep trading, the argument can turn personal very quickly. That is exactly when the paperwork matters. ASIC says a company constitution is the main internal rulebook, and it acts as a contract between the company, its directors and its members. ([download.asic.gov.au](https://download.asic.gov.au/media/5193666/info-162-disputes-between-officeholders-and-members-of-small-companies.pdf))

If there is a shareholders agreement, read it with the constitution, not after the argument has escalated. Company structures also follow the constitution or replaceable rules, so the documents can change who can vote, who can call a meeting, and what happens if the board is stuck. The starting point is the written rulebook, not memory. ([asic.gov.au](https://www.asic.gov.au/for-business-and-companies/companies/changes-to-company-details/adopt-or-change-a-company-constitution))

Read the clauses that matter

Pull the constitution, any shareholders agreement, board minutes and recent emails into one file. ASIC says these disputes are best handled with communication and legal advice, because they often involve ownership, management and control. If you do not have a current copy of the constitution, ask the company for one before the debate gets any louder. ([download.asic.gov.au](https://download.asic.gov.au/media/5193666/info-162-disputes-between-officeholders-and-members-of-small-companies.pdf))

Read for the clauses that matter in a deadlock. Look for director appointment and removal, quorum, voting thresholds, casting votes, reserved matters, drag along or buyout wording, and any clause that lets one side force a sale or a winding up vote. If the documents are unclear, do not guess; mark the gap for advice. ([download.asic.gov.au](https://download.asic.gov.au/media/5193666/info-162-disputes-between-officeholders-and-members-of-small-companies.pdf))

Source: Official guidance

Turn the argument into figures

Now turn the dispute into numbers. List cash in bank, debt due, expected receivables, payroll, tax, lease commitments and any personal guarantees. A company is a separate legal entity, but directors still make the business decisions, so you need to know what the company can actually fund before anyone argues about its future. ([business.gov.au](https://business.gov.au/registrations/work-out-your-business-registrations/categories))

Do not rely on a broad feeling that the business is healthy or broken. Prepare a one-page snapshot showing current work in progress, completed jobs, margins, overdue accounts and the cost of carrying on for the next month. If one director says liquidation is the only responsible path, ask them to point to the numbers that support that view. ([business.gov.au](https://business.gov.au/registrations/work-out-your-business-registrations/categories))

Test whether a buyout is realistic

If the company still has value, the next question is whether one director can buy the other out or whether both should sell. A buyout may be cleaner than liquidation, but only if you can agree on valuation, timing and funding. An independent valuation can stop the argument becoming a fight over imagined numbers. ([download.asic.gov.au](https://download.asic.gov.au/media/5193666/info-162-disputes-between-officeholders-and-members-of-small-companies.pdf))

Useful options might include staged payments, transfer of shares, a temporary standstill while advice is taken, or a mediated exit. ASIC recommends resolving these disputes with communication, mediation and legal advice. That is not a guarantee of agreement, but it can keep the issue inside a process instead of letting it spill into rushed decisions. ([download.asic.gov.au](https://download.asic.gov.au/media/5193666/info-162-disputes-between-officeholders-and-members-of-small-companies.pdf))

Get advice before anyone acts

Before anyone signs, moves money or tells staff the company is finished, get advice from a qualified lawyer or insolvency professional. A deadlock can become much harder to unwind once one side acts first. If there is a risk of liquidation, timing matters and advice should come before action. ([download.asic.gov.au](https://download.asic.gov.au/media/5193666/info-162-disputes-between-officeholders-and-members-of-small-companies.pdf))

Bring the constitution, shareholders agreement, latest management accounts, debt list and any proposed buyout terms to the first meeting. If you need help deciding what the documents allow and what the next move should be, call CRP today about dispute resolution. We coordinate independent qualified professionals who can help you map the options before the board makes a damaging move. ([download.asic.gov.au](https://download.asic.gov.au/media/5193666/info-162-disputes-between-officeholders-and-members-of-small-companies.pdf))