You and your co-owner spent years building a Texas business. Now sales have slowed, but the bills keep coming. You want to close the company before losses grow. Your co-owner refuses, leaving you unsure whether you can end the business without their approval.
That refusal does not always prevent you from closing a limited liability company (LLC). Your company agreement may allow you to move forward without every owner’s vote. If you cannot get enough support, a court might offer another option, but Texas law sets strict limits.
What if your co-owner votes no?
Your company agreement may set the rules for voting to close the business. It might require everyone to agree or allow fewer members to approve the decision.
If your agreement does not change the rule, Texas law requires more than half of all members to approve winding up, the process of closing the LLC. In a company with just two members, both must agree. In a larger LLC, enough members may support closure even if one owner objects.
Even after members approve winding up, the business does not close immediately. The LLC must handle outstanding debts, finish remaining work and file the necessary paperwork before it formally ends.
When can a judge order winding up?
If the vote fails, you may ask a district court to intervene. Texas law allows a judge to order winding up when problems are likely to unreasonably frustrate the LLC’s economic purpose. The court may also act when another member’s conduct makes it not reasonably practicable to continue together or when the company cannot reasonably operate under its governing documents.
For example, your agreement might require both owners to approve supplier payments. If your co-owner repeatedly blocks essential purchases, the company may lose orders and struggle to serve customers. A judge would examine whether those facts meet the legal standard. A disagreement alone does not guarantee closure.
You may want to keep your company agreement and records of failed votes. Financial reports can also show how the dispute affects daily operations. Those details can help you assess court-ordered closure or work toward an agreement with your co-owner.