Scottish insolvency stats – There may be trouble ahead
February 27, 2024
A Partnership Liquidation involves the collection of the remaining business assets, settling any remaining debts owed to non-partner creditors and distributing the remaining assets to the remaining partners.
The winding up of an insolvent unlimited partnership is a more complex matter than with a limited company, although there are many similarities between the conduct and practicalities of the processes involved. It may involve parallel action to deal with the affairs of some or all of the members of the partnership by declaring them bankrupt.
The comments here do not apply to a Limited Liability Partnership (LLP) which would be wound up as though it was a limited company, either by way of a Compulsory Liquidation or a Creditors’ Voluntary Liquidation.
There are five ways to wind up the affairs of an insolvent unlimited partnership:
A petition for winding up by a creditor must be for the recovery of a debt of £5,000 or more. It can only be served after a Statutory Demand has been issued and the debt has not been paid or a settlement agreed.
Where one or more of the individual partners is a corporate entity, instead of a petition for its bankruptcy, a winding up petition against it will be necessary.
The decision on which of the various winding up options for an unlimited partnership to take must be based on a careful analysis of who owns its assets and who is responsible for its liabilities, as well as the separate financial positions of its partners.
For more information on Partnership Liquidation, we offer an initial free consultation to review the situation and make recommendations on the best way forward. If we think that Partnership Liquidation is the best route forward, our specialists can support the business at every step of the way through the process.
Contact our Head Office on +44 (0) 20 3326 6454 to arrange a no obligation and confidential call with one of our Partners.
“We approached Steve Parker of Opus when our business, which was in the hospitality sector, began to get into difficulties. Steve was helpful and supportive and gave clear and timely advice regarding our options. Resultantly the company was placed into Administration which was handled by Steve and his team in a fair and very professional manner. As a consequence we were able to emerge with a much slimmed down business which has flourished over a number of years allowing us to build up considerable reserves sufficient to see us through any future period of uncertainty”