Partnership Administration - Pros and Cons

At Express Tax Solutions we believe it is important for you to know the pros and cons of Administration and by comparing the two together and how it may affect your circumstances will help you gain a better understanding of the overall process.

By entering into Administration you will be able to demonstrate to all your creditors of your commitment to resolving your financial situation and to use the time implement a practical solution to repay the creditors.

Pros

The advantages of Administration are:

1. The partnership will be protected from existing creditors
2. The IP will control the partnership and will have examined the issues within 3 months to, determine the best possible solutions to overcome the insolvency
3. Creditors cannot put any further pressure on you
4. It may possibly maximise your creditor's interests
5. If one of the partners becomes insolvent, the individual partner's creditors will not be able to attack the partnership.

Cons

The disadvantages of Administration are:

1. An IP will control the partnership and making some crucial decisions
2. All creditors and customers of the business will need to be aware that the partnership is in administration
3. There will need to be sufficient liquidity to enable the partnership to trade through the process of administration.
4. It does not protect each partner's estate.
5. The partners will lose control of the business

However these risks are outweighed by the protection provided by administration and the potential to essentially restructure the partnership.

Contact our offices for free advice on what would be the best option for your partnership.