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Partnership Administration FAQs

28th June, 2019
Keith Steven

Written ByKeith Steven

Managing Director

07879 555349

Keith is the author of the content on this comprehensive rescue, turnaround and insolvency website. He is the managing director of KSA Group Ltd - a specialist firm of turnaround and licensed insolvency practitioners. Keith was nominated for Turnaround Practitioner of the Year 2014 at the National Insolvency and Rescue Awards in 2014.

Keith Steven

Useful links for this page – A Guide

Q: I have heard this protects the unregistered company (the partnership) from its creditors- how?

A: The partners (or a creditor) petitions  for and administration order which grants a partial moratorium, then the court grants the full moratorium (usually).

Q: What actually happens in Administration?

A: See the full guide at Partnership Administration.

Q: What will my creditors think?

A: Well, of course, they will be concerned. They will need to be kept informed and the partnership must inform them that an administrator has been appointed on all correspondence. They will not (probably) provide credit but they may continue to trade on a pro-form basis. If the partnership proposes a PVA or simultaneous IVAs they will have a vote to support or reject the deal.

Q: Do we stay in control after the Administration starts?

A: No, the administrator runs the partnership and will determine the outcome. Obviously he /she will want to use all available support where appropriate.

Q: What will HMRC say?

A: They will be keen to know what the intended outcome of the administration process is. If it is a voluntary arrangement then they will have a vote at a creditors meeting to support or reject the administrators voluntary arrangement proposals. But they will seek to scrutinise the deal and the actions of the partnership prior to the insolvency. They will be concerned to ensure that future taxes are paid on time and within the scheme rules.

Q: What can the landlord do?

A: The landlord cannot take any action (unless the court allows) once the administration order is granted.

Q: I am worried that one partner is gambling etc. What can we do?

A: Do you have any partnership agreement that states what disclosures of a partners financial position are available?

If yes, calling on this as a partnership agreement can determine the process of dealing with such problems.

If no, discuss with the partner whether:

  1. Has he/she had any distress?  For example have any creditors sent in bailiffs or sheriffs for debt collecting purposes).
  2. Have they had any County Court Summonses?
  3. Have they had any County Court Judgements? (What are they?)
  4. Have they had any writs?
  5. Have they had any statutory demands?

If he/she has, this can lead to the domino effect. (See our guide by clicking). It is essential that you take a planned and practical approach to the individual partners insolvency as this can bring down the whole partnership and or the other partners.

Q: Will I lose my home if the administration process leads to failure?

A: This is a very complex insolvency procedure. We therefore cannot say what the individual circumstances will lead to. Be very sure that you take independent advice. Call 0800 9700539.

Q: There are parts of the business that are simply not viable. Can they be discontinued/removed?

A: This is dependent on the aim of the Administrator and the outcome could be that parts or all of the business can be sold. Using a PVA or SIMIVA, it could be possible to extricate from leases/property etc. Again this is very complex. 0800 9700539.

Q: We are not facing legal actions and can keep the bank happy but in two months we will run out of cash. Is Partnership Administration the answer?

A: Probably not. Consider Trading Out, Informal Financing, PVA, SIMIVA.

ABOVE ALL, ACT SOON! If the business is contingently insolvent you must do something about it in sufficient time to allow a strong appropriate solution to be planned. Call now we can help. (Call 08009700539).

Worried Director What Will Happen To Me After Liquidation?

in Company Liquidation What is …?

"A man in the pub said I cannot be a director of any other company if I liquidate my company. Is this true?"Actually, this statement is entirely false! Misconceptions like this frequently arise from individuals with limited understanding of the subject matter. Such misinformation can cause undue anxiety for directors considering liquidation, fearing it might personally affect them. Guess what? Listening to bar room experts, inexperienced accountants, or no insolvency specialist lawyers can stop decisions being made, this failure to make a decision is really what could land you in trouble. So how will liquidation affect me and how long does it take? Having a limited liability company means that the directors have little risk (or limited liability) if the company fails, as long as they have acted properly and acted in time. What is more, if as a director, you have been compliant and on the payroll for many years, you can actually claim redundancy from the government like any other employee. But, and it is a big but, if you fail to act in time, fail to act reasonably, fail to keep books and records, continue taking credit KNOWING that the company cannot possibly repay it, then you ARE at risk of personal financial loss or worse such as losing your house. So, act now and get help for your company and more importantly start reducing your own risks.Voluntary liquidation is the quickest most efficient way to deal with an insolvent company that has no future. As a director of an insolvent company, you are at risk if you do not act. This risk RISES the longer you don't act to put the company into liquidation.If you fail to act and the company is wound up by the creditors (compulsory liquidation) then the Official Receiver (OR) will be appointed to liquidate the business and he or she will investigate the activity of the directors and the business over the last 2-3 years. This is known as a conduct report on each director.  If the OR can prove there was wrongful trading where, for instance, you have taken credit from a supplier or took deposits from customers when you knew that it was highly unlikely that you could pay them back, then you could be made personally liable.This is known as the "lifting of the veil of incorporation" that protects directors under limited liability. If this happens then you could made liable for PAYE, VAT and creditors monies from the time that you should have known the company had no reasonable prospect of surviving the problems it faced.Additionally, the directors may face disqualification proceedings under the Company Directors Disqualification Act 1986 for up to 15 years, they can be fined and may face the loss of personal assets like your home, or even personal bankruptcy.Look, if you as directors have acted naively you may not know that you have broken these laws, but now you do know, it is vital to ensure that you protect yourself as a director by acting quickly to cease trading and put the company into voluntary liquidation; or consider a company voluntary arrangement if the company is VIABLE if the problems are solved. What is Creditors Voluntary Liquidation and what does it mean for me? In short, liquidation usually means, the company's trading stops and it's assets are turned into cash or "liquidated".All other possible liabilities, like employment liabilities, landlord's rent or payments to lease companies are stopped. It really is the end of the company, but the "business" may survive if a phoenix is organised. Liquidation is a powerful way to END creditor pressure and let you get on with your life. What if I have signed personal guarantees? If you have signed personal guarantees or indemnities to lenders, then the liquidation could lead to them being called in if the bank cannot get its money back from the company. There is little that can be done about that, but you should not delay decisions on liquidation to try and prevent a PG being called in: just think what ALL of the company's debts landing on your shoulders would do. Also it should be noted that HMRC now rank ahead of floating charge holders in any liquidation since December 2020.  Consequently, this may well mean that lenders that you have personally guaranteed will get less recovery hence exposing you more.All banks will agree a deal to repay the PG over time - provided you work with the bank to reduce their exposure.One great piece of FREE advice - always make sure that ALL tax returns, VAT returns and annual returns have been completed and sent in and that other "compliance" issues are dealt with wherever possible. These are important processes and will help protect you as individual directors. It shows that you have been acting properly.  I have heard about directors being able to claim redundancy in liquidation If you have been employed by the company and made payments via PAYE then you will be able to claim redundancy from the government and this is in fact a very simple process (20 minutes to fill out a form and we can help with that) so there is no need really to employ a third party to make a claim.  This process has been open to fraud so the HMRC are cracking down on operators that claim to be able to get money back when there is not enough "paperwork".  It isn't worth the risk.  If it sounds too good to be true then it probably is!You need to learn more about the options. This is clearly a general guide so, if you have any worries at all, please, just call us and we will talk you through the situation free and with expert guidance for your situation. Call one of our advisors or if you prefer, call our IPs (insolvency practitioners) now:Just one CALL will help relieve the stress and get you out of the mess.Why not call 08009700539 or 020 7887 2667 now?We could help you start the liquidation process today.(8.15am till 5.00pm; Out of hours call on 07833 240747, Wayne Harrison (IP)  or Eric Walls (IP) on 07787 278527)Finally, please remember this: NO BUSINESS is worth losing your health, relationships, marriages or your children over. Act properly, take advice, get the problem sorted and then get on with your life. In a little while the stress will go and you can focus on other things that are more important.Want more information on liquidation? Get our new free 2023 Experts Complete Guide to Creditors Voluntary Liquidation that covers Bounce Back LoansWe are experts in liquidation, voluntary liquidation, administration, pre-pack administration, business rescue, corporate rescue and company rescue, we can help solve your problems but only if you talk to us. Call 0800 9700539 for help.or email us your worries at 

Worried Director What Will Happen To Me After Liquidation?

Notice of Intention To Appoint Administrators

A notice of intention to appoint administrators is when the company files a document to the court to outline that it intends to go into administration if a solution cannot be found to its immediate financial problems. It can be used as part of the pre-pack administration process as well as used to restructure a failing business to avoid its liquidation.

Notice of Intention To Appoint Administrators
Man with umbrella

What Is A Winding Up Petition By HMRC or Other Creditor

A winding up petition is a legal notice put forward to the court by a creditor. The creditor petitions to the court if they are owed more than £750 and it has not been paid for more than 21 days. The application, in effect, asks the court to liquidate the company as they believe the company is insolvent.

What Is A Winding Up Petition By HMRC or Other Creditor

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