Partnership Insolvency

Thinking of a Partnership Insolvency? What Are The Options?

Partnership Insolvency is a serious business: are you taking the right advice?

Insolvent businesses are usually limited companies. However, a partnership insolvency occurs when a partnership gets into difficulties and becomes insolvent. Businesses can trade as a partnership in order to avoid the various strictures of limited company status and thereby the obligations of a limited company. Additionally, some professions traditionally tend to trade as partnerships and these include architects, engineers, accountants and chartered surveyors.

Unfortunately, these industry sectors tend to see the worst of a recession, and so many a partnership insolvency will occur during the present climate among such related firms.

A partnership insolvency may readily be addressed by a Partnership Voluntary Arrangement (PVA) which has similar terms, provisions and intentions as the better known Company Voluntary Arrangement (CVA) and indeed Individual Voluntary Arrangement (IVA). Recent changes in practice mean that a PVA can be proposed out of court.

An insolvency practitioner must be called in to supervise the PVA, and it is through him or her that the PVA is proposed to the creditors of the partnership. If a majority of creditors accept these proposals then the PVA is binding on all the creditors. After this has been reported to the court the main formalities have been achieved, and the partnership is then left to continue without fear of being attacked by any of the creditors.
It will be seen that a partnership insolvency may be carried out together with provisions for individual partners. For example, an IVA may be proposed as well as a PVA if that is appropriate. No two cases are the same. We will look at what is happening in your business and suggest the course of action out of the numerous possible combinations which is the most beneficial to the business and to the partners.

If you would like about partnership insolvency to talk to a specialist with 17 years corporate insolvency experience then enter your details into the web form below for a no-obligation chat.

However, if you need help with personal debt (rather than business related debt) go to our free debt management plan application form.

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