Partnerships and Insolvency
Partnerships can be either the traditional entity (“traditional”) or a Limited Liability Partnership (“LLP”), the former has unlimited joint and severally liability for all partners, where as the LLP does not. The insolvency options available depend upon the type of partnership.
We can advise as to the most appropriate process based on the individual circumstances.
How we can help with partnerships and insolvency?
Options available for Traditional Partnerships are: Partnership Voluntary Arrangement (“”PVA””); Linked Individual Voluntary Arrangements; Partnership Administration Order and Compulsory Liquidation.
Options available for LLP’s are: Company Voluntary Arrangements (“”CVA””); Administration; Members Voluntary Liquidation (“”MVL”” or solvent liquidation); Creditors Voluntary Liquidation (“”CVL””) and Compulsory Liquidation.
Advising on the options
Selecting the best option for you
Implementation
Testimonial
“We approached Chamberlain & Co after experiencing a reduction in sales. They formulated a PVA proposal to address the Partnership debts from the realisation of the Partnership’s book debts and also mitigated any liabilities for the individual partners. We found Chamberlain & Co to be highly professional and patient.
The financial distress to the Partnership had caused dispute between the partners and the advice of Chamberlain & Co helped to resolve these issues and enabled the partners to concentrate on the running of the business once more.”
Contact Us
We are happy to offer you an initial free consultation that can be done remotely on a video, telephone call or a face to face meeting. We will discuss your circumstances and the goals of the business and priorities of the partners. We can then advise upon the suitable options available.
Give us a call on 0113 242 0808 or e-mail advice@chamberlain-co.co.uk.
What are the advantages and disadvantages?
Advantages
- The ability to tailor the appropriate process to meet the individual needs of the Partnership and the partners.
- Enables the partners to concentrate on running a successful business under the protection of the selected option.
- Can be a solution for individual and partnership debts.
- It provides a clear plan to the partnership on the way forward for the business.
Disadvantages
- The need to get the required number of partners to agree on the route forward.
- Some options require the agreement of both partnership and individual creditors
Partnerships & Insolvency FAQ's
I am a partner/member of a partnership, am I liable for all its debts?
In a Traditional Partnership, all partners are usually jointly and severally liable for its debts. However this can depend on the Partnership Agreement, which we will have to review to be able to provide specific advice.
Can we put our partnership into liquidation?
Traditional Partnerships can only be placed into Compulsory Liquidation.
LLP’s can be put into a CVL, MVL or Compulsory Liquidation.
What happens if one of my partners becomes insolvent?
Where one partner becomes insolvent, the Partnership is usually dissolved. The relevant share of the insolvent partner’s assets will then become available for creditors, and the remaining partner will usually look to purchase insolvent partner’s interest.
My Partnership is insolvent, are my personal assets at risk?
Depending on the type of Partnership, the consequences on the partners individual financial circumstances may be radically different. In a Traditional Partnership, all the partners personal assets are exposed to the claims of their own and the Partnership’s creditors. It is important to seek advice early so these consequences can be mitigated or avoided. The claims of creditors of a LLP are limited it’s assets.
My Partnership is insolvent, what should we do?
If it is a Traditional Partnership, the options include: PVA; Administration and Compulsory Liquidation.
In a LLP, the options include: Company Voluntary Arrangements (“”CVA””); Administration; Members Voluntary Liquidation (“”MVL”” or solvent liquidation); Creditors Voluntary Liquidation (“”CVL””) and Compulsory Liquidation.”
It is important to seek advice early to decide upon the most appropriate option.
