The Business Debt Advisor

Partnership Administration Order - FAQ's

 
When can the "out of court" procedure not be used?
When the partnership is already

• In Administration
• Is in liquidation either as an unregistered company or under the Insolvent Partnerships Order 1994
• Has in the past 12 months had a small partnership moratorium in place (this is a partnership voluntary arrangement with added protection.

Documents filed for an "Out of Court" appointment
A notice of intention to appoint an administrator by partners incorporating a statutory declaration, giving not less than 5 business days notice to any Qualifying Floating Charge Holder and to various other prescribed parties.

• A notice of appointment of an administrator by the partners.
• A statement by the proposed Administrator that he/she consents to the appointment and considers the purpose of the Administration is reasonably likely to be achieved.

Application to the court
The appointment can be made by application to court and submission of the following:

• A statement by the proposed administrator that he/ she consents to the appointment and considers the purpose of the Administration is reasonably likely to be achieved.
• An affidavit/witness statement
• An application for administration - this must be served on any Qualifying Floating Charge Holder not less than 5 days before the hearing.

The court can only make the order if satisfied that the partnership is unable to pay its debts and that the administration order is reasonably likely to achieve the purpose of the administration.

What type of creditor action will be stopped by an Administration?
The type of creditor action that administration will stop includes:-

• Bailiffs distraining on behalf of rating authorities
• Landlords distraint for arrears of rent
• Action by Inland Revenue and Customs & Excise to enforce their debt

Can the 12 month administration period be extended?
The 12 month period can be extended by the agreement of more than 50% of the unsecured creditors or by a court application.

What publicity is required?
An administrator must advertise notice is his/her appointment in the London Gazette and a local paper appropriate for bring the appointment to the attention of the partnership's creditors.

All partnerhip documents, letters etc must state that the company is in administration and that the affairs of the company are being managed by an Administrator. The creditors meeting will be advertised.

 

The Next Step

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