Partnership Administration Orders are granted by Court on the application of creditors or partners when the partnership can be shown to be insolvent.
Once you have applied for a Partnership Administration Order, the Court would grant the Order where it is satisfied that the partnership is unable to pay its debts and where one of the following events would be achieved:
- The continued trading of the partnership as a going concern
- Agreement to a PVA
- Greater asset realisation than would be possible under a winding up action
A petition for a Partnership Administration Order can be presented to the Court by members of the partnership, creditors of the partnership or a PVA Supervisor.
Where a Partnership Administration Order is granted, an administrator is appointed who takes control of the affairs of the business. Actions against the partnership by creditors are frozen and they are unable to take action against the partnership without permission from the court or the appointed administrator.
Specific advice should be obtained before taking action, or refraining from taking action, on any of the issues covered above.
For further information, please contact one of our Partners who will be able to assist you.