Partnership insolvency

General partnerships

A general partnership is the relation between persons carrying on a business in common with a view to profit. As it is not a separate legal entity from its partners, it cannot acquire rights, incur obligations or hold property in its own right and in its own name. It also cannot (with one limited exception) grant a floating charge.

General partnerships can be subject to the following insolvency processes:

1. •

   administration—administrators can be appointed either by the court or out of court. The members of the partnership are not personally liable for the debts of the partnership during the administration, unless they consent

2. •

   partnership voluntary arrangement—similar to company voluntary arrangements (CVAs) under the Insolvency Act 1986 (IA 1986)

3. •

   winding-up as an unregistered company—partners are personally liable for the debts of the partnership too, so concurrent bankruptcy petitions may be issued against one or more partners (note that there is no equivalent to voluntary winding