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Unlike the directors of a Limited company, partners in a partnership have personal liability for all of the debts of the partnership business.

Where a partnership is insolvent there are a number of options for the partners to consider: -

• Liquidation (of the partnership)
• Bankruptcy (of the individual partners)
• Partnership Voluntary Arrangement
• Partnership Administration Order
• Individual Voluntary Arrangement

It is important to note that creditors will usually only agree to some kind of Voluntary Arrangement if its outcome will provide them with a higher commercial return than liquidation.

The Insolvent Partnerships Order 1986 was made to deal with the winding up of partnerships. This was amended by The Insolvent Partnerships Order 1994.

To view either Insolvent Partnership Order please click on the appropriate text of the left hand index.