Company Rescue Live Help

Need help?

call 0800 9700539
  01289 309431
  0131 242 0081
  020 7877 0050
  Out of hours: 07833 240747
  Or Click Here For Live Help



 

Protected by Copyscape Online Copyright Protection Software





Joint & Several Liability


What does Joint & Several Liability mean?


A partnership is a trading entity made up of a number of individual people known as "members". In insolvency there is no protection for the partnership individual members as in a limited liability company. The individual partners or members are fully liable for the partnership debts if the partnership cannot meet them.

 

Joint and Several Liability implies that all members are liable for the partnership debts in full or in part individually, dependent usually on their ability to pay. Thus a creditor(s) /liquidator can "go after" the member with the most assets to satisfy debts then the next and so on until all debts are satisfied or until all partners made bankrupt.

 

Trading as a partnership can carry some tax rewards and other benefits but when things go wrong or the partnership becomes insolvent (or only even if an individual partner becomes insolvent) a partnership can be a nightmare to deal with. There are powerful arguments to incorporate a fast growing partnership or one that is increasing its debts – especially where tightly drawn up partnership agreements are NOT in place.

 

See Domino Effect for further details.