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Partnerships

There are many businesses in the United Kingdom trading as partnerships. These range from small two partner businesses to substantial professional practices turning over millions of pounds.

The problem with any insolvent partnership is that not only is the business affected, but the partners’ individual assets are also at risk. Many partners feel that they are not as well protected as those directors who trade their business through a limited company. In practice the directors of small companies often have to give personal guarantees in order to obtain credit/banking facilities.

The insolvency legislation provides a number of possible solutions for insolvent partnerships. The partners can put forward a Partnership Voluntary Arrangement (P.V.A.). This is similar to a Company Voluntary Arrangement or C.V.A. A proposal is usually put to the partnership creditors in full and final settlement of their debt. That proposal often involves contributions from the partnership’s trading profits and/or an injection of funds. These monies are paid into a fund administered by the licensed insolvency practitioner who acts as Supervisor of the Arrangement. It may however also be necessary for the individual partners to also enter into Individual Voluntary Arrangements (I.V.A.) with their creditors at the same time.

As with all forms of insolvency, generally the sooner advice is sought the greater the number of options that are available. If you trade in partnership and are suffering financial pressure we offer free initial consultations.

For further information and a free consultation contact Lines Henry on 08081 446611.

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