Advice for Partnerships

One important thing to remember about a partnership (joint and several) is that each member is also responsible for their partner’s business and personal debts; not just their own. This doesn’t apply if an LLP is in use. If a single partner or entire partnership is experiencing financial difficulty, each or all partners should seek advice before the situation gets any worse.

When it comes to insolvency, partnerships are dealt with via a hybrid of rules and regulations. Therefore, a partnership may be subject to the following procedures:

  • Partnership Voluntary Arrangement
  • Compulsory Winding up
  • Partnership Administration Orders
  • Interlocking IVAs

Partnership Voluntary Arrangement

A PVA will take into account a partnership’s assets liabilities and debts; providing a very similar concept to a CVA. The main difference is that, due to the personal liability of each partner, each partner will more than likely have to pursue an IVA to protect their personal assets. Each member is liable for the total debts in full. A Licensed Insolvency Practitioner is required to supervise these arrangements and a Nominee is needed in order to prepare the proposal and make comments to the court.

Partnership Winding up Order

In this circumstance, where the creditor has petitioned a winding-up order, each partner will receive a bankruptcy petition and the company will likely be closed for good.

Partnership Administration Orders

These are granted by the Court after application from creditors or partners when a partnership is proven to be insolvent. The business is then run by a professional insolvency practitioner who will hopefully be able to make the most of realisations by selling as a going concern. Administration is advantageous as it protects the assets by way of moratorium.

Interlocking IVAs

Partnerships may have interlocking IVA’s in place of the PVA, especially if it is a small partnership with indistinct assets. Each IVA will include all debts owed by the partnership and how much will be repaid.

Our Senior Partner: John Bell

John is a Fellow of the Institute of Chartered Accountants and a Licensed Insolvency Practitioner.

He graduated with BA (Hons) from Liverpool’s John Moores University in 1986. He then moved to London, where he worked for Grant Thornton and Smith & Williamson during which time he gained his qualification as a Chartered Accountant. In 1994 John gained his Insolvency Licence and established Clarke Bell. Since then John has gained extensive expertise in all matters relating to the strategies and practicalities of both Corporate and Personal Insolvencies.

Our office

Manchester

3rd Floor, The Pinnacle
73 King Street
Manchester
M2 4NG

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Contact

Phone: 0161 907 4044
Freephone: 0800 195 6768
E-mail: [email protected]

Our office

Licensed Insolvency Practitioners for over 23 years

A member of:

The Institute of Chartered Accountants Association of Business Recovery Professionals Insolvency Practitioners Association
Business Debt

Business Debt

Thank you for all your help with the liquidation matters. You were a joy to deal with.

MVLs

MVLs

Our MVL was handled in a timely manner and I was kept informed of progress throughout.

Insolvency

Insolvency

Thanks to the help I received from Clarke Bell, I am able to pay off my debts in a reasonable and realistic manner.

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