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This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.

A common Florida pattern looks like this: two people start a company as equals. Fifty-fifty on the cap table, both on the ledger as managers, every big decision made over coffee because they agreed on everything anyway. Ten years later the company is worth real money, the coffee meetings have stopped, and the operating agreement — if there is one — says nothing about what happens when two people who each control half of everything stop agreeing. One wants to sell. One wants to hire a CEO and hold. Neither can outvote the other, and neither can be outvoted. The company doesn’t fail; it just stops being able to decide anything.

Florida has a statute for this moment, and in 2020 the Legislature quietly rewrote it in a way most founders — and frankly, plenty of lawyers — still haven’t absorbed. The rewrite says, in effect: if you drafted a deadlock exit into your operating agreement, your contract beats the courthouse. That single move changed how every Florida buy-sell clause should be drafted, and it changed the litigation playbook for every 50/50 fight.

The deadlock ground sounds available until you read its elements

Start with the baseline. of the Florida Revised LLC Act lists the grounds on which a circuit court may dissolve an LLC. The one everybody reaches for in a partner fight is subparagraph (1)(b)5: the managers or members are deadlocked in the management of the company’s activities and affairs, the members are unable to break the deadlock, and irreparable injury to the company is threatened or being suffered.

Read that last element again, because it does more work than people expect. Deadlock alone is not enough. A company that keeps shipping product, collecting receivables, and paying distributions while its two owners refuse to speak may not be suffering irreparable injury at all — it may just be an unhappy, profitable company. Courts treat dissolution as a drastic remedy, and the injury element is where a motion to dismiss lives. The practical consequence: the member who wants out of a functioning business often has a weaker statutory hand than the anger suggests. That asymmetry shapes every negotiation that follows.

Florida also gives the company and the other members an off-ramp even when dissolution grounds exist. Section 605.0706 lets the company or the remaining members elect to purchase the petitioning member’s interest at fair value instead of dissolving. So even a successful dissolution petition frequently converts into a valuation fight rather than a wind-down. If you’ve read our piece on buying a Florida LLC membership interest through the charging-order lens, you already know the theme: Florida LLC law channels disputes toward transfers of interests, not destruction of businesses.

In 2020, Florida told the courts to stand down when the contract speaks

Here is the part that changed the game. Chapter 2020-32 added subsection (2) to § 605.0702, and it is blunt about the hierarchy. If the members are deadlocked, unable to break the deadlock, and irreparable injury is threatened or suffered — the exact posture where a court could dissolve — but the operating agreement contains a “deadlock sale provision” that has been initiated before the court determines that grounds for dissolution exist, then that provision applies to the resolution of the deadlock instead of the court entering a dissolution order or a § 605.0706 purchase order. The statute says the contractual mechanism displaces both judicial remedies, so long as the provision is initiated and effectuated in accordance with its terms.

Subsection (3) then adds the timing rule that turns this into a race. Filing a dissolution action does not cut off the other member’s right to initiate a deadlock sale provision afterward. As long as the contractual mechanism is initiated and effectuated before the court actually enters its order, the mechanism controls. Picture the sequence: one member files for judicial dissolution on a Tuesday, intending to force a sale on the courthouse’s terms; the other member triggers the operating agreement’s buy-sell on Wednesday. Under the statute, that Wednesday notice — not the Tuesday complaint — likely decides how the deadlock resolves, provided the mechanism actually runs its course per its terms. Litigation becomes the backstop, not the main event.

Two drafting lessons drop straight out of the timing rule. First, “initiated” should be defined. A provision that springs into effect upon vague conditions — “in the event of a material disagreement” — invites a second lawsuit about whether it was validly triggered, which is exactly the fight the statute was trying to preempt. Give the trigger a mechanical definition: written deadlock notice, a failed vote repeated at two consecutive meetings, a certified impasse after mediation. Second, “effectuated in accordance with its terms” means sloppy procedure can forfeit the statutory protection. Missed deadlines, defective notices, and improvised price adjustments all hand the other side an argument that the provision was abandoned and the court should resume control.

What counts as a deadlock sale provision is broader than a shotgun

The statute defines “deadlock sale provision” generously. It includes a redemption or purchase and sale of interests between members, a governance change, a sale of the company or substantially all of its assets, or any similar provision that breaks the deadlock by transferring interests, changing governance, or selling the business. That breadth is an invitation to draft creatively, and the standard menu runs roughly as follows.

First, the shotgun — sometimes called Russian roulette. One member names a per-unit price; the other must either buy the namer’s interest or sell its own interest at that price. The elegance is self-pricing: name a low number and you’ll be bought out low; name a high number and you’d better be ready to write the check. Second, the Texas shootout: both sides submit sealed bids to buy the other out, highest bid wins and closes. Third, the appraisal put/call: a neutral appraiser sets fair value and one side has the option — or the obligation — to transact at that number. Fourth, the full-company sale: deadlock triggers an obligation to engage a banker and sell the whole business to a third party, with both members bound to cooperate and to vote for the resulting deal. Fifth, the governance fix: deadlock seats a third, independent manager or hands a tie-breaking vote to a designated outsider — the only option on the menu that resolves the impasse without anyone leaving.

Which one belongs in your agreement depends on facts that are knowable at drafting time: relative wealth of the members, whether either could realistically finance a buyout, whether the business is the kind a third party would pay full value for, and whether the members’ families depend on distributions. These are the same questions that drive how a Florida operating agreement should allocate member consent rights in a sale — the deadlock clause is just the consent architecture running in reverse.

The shotgun prices fairness only when both sides can pull the trigger

The shotgun clause deserves its own warning label. Its theory of fairness assumes symmetric capacity: the price is honest because the namer doesn’t know whether they’ll be the buyer or the seller. But the theory collapses when one member can fund a purchase and the other cannot. The wealthier member can name a lowball price with confidence, knowing the cash-poor member has no realistic ability to elect “buy.” In that world the shotgun isn’t a fairness device — it’s a forced sale at a discount, dressed up as symmetry.

The drafting responses are well developed. Give the electing party a meaningful financing window — ninety or one hundred twenty days — so that “buy” is a real option for a member who needs an SBA loan or an outside investor. Add an appraisal floor, so the named price cannot fall below some percentage of independently determined fair value. Or replace the shotgun with the full-company-sale trigger for businesses where third-party value clearly exceeds what either member could pay — the market becomes the appraiser. And remember that the transfer machinery has to work alongside the rest of the agreement: a buy-sell that contradicts the agreement’s own amendment and consent provisions is a coherence problem we’ve written about before in the context of operating agreement amendment provisions that quietly require unanimity.

Draft the exit before you need it

The 2020 amendment rewarded exactly one kind of founder: the one who negotiated a deadlock mechanism while everyone still liked each other. It is much easier to agree on a fair process when nobody knows which side of it they’ll stand on — the veil of ignorance does real work in a buy-sell negotiation. Once the deadlock arrives, every procedural choice telegraphs position, and the statute’s race dynamics mean the unprepared member may find the dispute resolved by a contract they signed a decade ago and haven’t read since.

The practical checklist is short. A two-member Florida LLC without a written deadlock sale provision is running on the statutory defaults — dissolution litigation with an irreparable-injury hurdle and a fair-value buyout election — which is to say, on expensive uncertainty. A two-member LLC with a deadlock clause should stress-test it now: is the trigger mechanical, is the timeline realistic, can each member actually finance the outcomes it contemplates, and does it hold up against the funding asymmetry between the members as they exist today rather than as they were at formation. In most cases, an afternoon of drafting beats a year of Chapter 605 litigation.

If you are a Florida LLC member staring down a 50/50 deadlock, or drafting an operating agreement before one starts, feel free to reach out to our firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.