It is similar in a number of ways to the Administration procedure for a limited company and also has similarities to administrative receivership but it is important to be viewed in isolation and not confused with these related solutions.
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:
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.
The administrator works with the partnership on an agreed plan or a pre pack agreement to restructure the debt so that the business can be handed back to the partners once a successful restructuring has taken place.
For more information on Partnership Administration Orders and the options that are available to you and your partnership, you can arrange a free consultation at one of our regional Begbies Traynor offices and seek confidential advice from a licensed insolvency practitioner.