Partnership Liquidation

Partnership liquidation is a process whereby the assets of a partnership are sold off in order to pay the debts of the business.

This can be done either by the partners themselves or by a court-appointed receiver.

In order to petition for partnership liquidation, there must be an outstanding debt of at least £750 owed to you, against which a Statutory Demand has been issued and not complied with.

The demand can be served either at the partnership’s principal place of business, on any of the partners or on anyone else who has control of the partnership at the time of the service.

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    At the same time, you can petition for the Bankruptcy of the partners – or, if the partnership has Corporate Members, wind them up.

    The process of partnership liquidation can be complicated and it is advisable to seek professional advice before taking any action.

    If you are owed money by a partnership that is in financial difficulty, you may be able to petition the court to place the partnership into liquidation in order to get your debt repaid.

    In order to do this, there must be an outstanding debt of at least £750 against which a Statutory Demand has been issued and not complied with. The demand can be served either at the partnership’s principal place of business, on any of the partners or on anyone else who has control of the partnership at the time of the service.

    At the same time as petitioning for the liquidation of the partnership, you can also petition for the bankruptcy of the partners or, if the partnership has Corporate Members, wind them up.

    Before starting, it is important to map out exactly where the company has assets and liabilities, as once the partnership has been officially wound up, the assets must be used to offset the liabilities with shortfalls being accountable personally (ranking alongside personal creditors).

    There are additional consequences to be wary of as well such as partners having the potential to be disqualified as performing the role of a director at a private Company going forward.

    The process of partnership liquidation can be complicated and it is advisable to seek professional advice before taking any action.