The Winding-Up Process

Generally a partnership business is often treated like an unregistered company and is subsequently wound up in the same way that a company would be.

The winding up process of the partnership means you would firstly need to commence the liquidation proceedings by concluding that having looked fully into the affairs of the partnership and ascertaining whether it is solvent or insolvent. Liquidation can be used for both solvent and invent companies.

We will recommend one of our expert Insolvency Practitioners to be appointed as the liquidator in order to carry out the entire process for you and your partners to achieve the best possible results.

The liquidator will have the duty and responsibility to:

• Gather the assets of the partnership and sell them so that they can be distributed in accordance with the statutory order. This would also include any deficiencies due on each individual partner's account as well property, assets and other debtors.
• Ascertain if there have been any transactions undertaken which have enabled the partners to be placed in a better position than what they should be i.e. preferences or transactions at an undervalue. If any of these transactions took place prior to the winding up action, they can be reversed through the Courts.
• Look at the partners' behavior prior to the liquidation proceedings, in particular where the partnership is insolvent to identify whether there was any wrongful trading.
• Distribute payments to all the creditors in order of priority.

In order for the liquidator to carry out his duties properly, he is given extensive powers in the course of his appointment which includes the power to:

• Sell assets;
• Use the bank account of the partnership;
• Appoint agents;
• Litigate on behalf of the partnership and defend any action against the partnership;
• Carry on the partnership's business.

Deciding to wind up your company or any threat from creditors to wind up your company is a serious matter and is a decision that should be made with careful consideration.

Contact us to speak to a business turnaround practitioner to advise you of and your partners of the best possible way to move forward on 0121 222 2422.