By making an application for a Partnership Administration Order against the partnership you are allowing all creditor debts to be frozen until a viable solution has been found. Such orders can be made if the partnership is considered insolvent under English law.
To determine the insolvency of the partnership, the Court will only make a Partnership Administration Order if it is satisfied that the partnership can no longer continue to pay its debts as and when they fall due, and that by granting the Administration Order, there will be one of the following outcomes –
- The partnership continues as a going concern
- The partners enter into a Partnership Voluntary Arrangement (PVA) whereby the partnership debts are effectively restructured and possibly written off
- The realisation of partnership assets if greater than that in winding up.
A petition for a Partnership Administration Order can be presented to the Court by:
- partnership members or
- partnership creditors or
- a Partnership Voluntary Arrangement (PVA) Supervisor
Upon the making of a Partnership Administration Order creditors actions against your partnership are frozen and the creditors cannot try and pursue the Partnership for the outstanding debts.
An Insolvency Practitioner that we recommend will act as an Administrator and will be responsible for dealing with the management of the business and its affairs. That Administrator will work closely with you and Express Tax Solutions to ensure that the Partnership achieves the objectives set out during the Administration period.
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