This information is a guide to winding up, your limited liability partnership or removing it from the register. The information summarises some of the rules that apply to voluntary arrangements, administration orders, receivers, and voluntary and compulsory liquidations. It also covers how and why limited liability partnerships are struck off and dissolved.

This information also covers how, in certain circumstances, your limited liability partnership may be restored to the register.

Please remember that if your limited liability partnership is considering liquidation, or any other measures to deal with insolvency, you should seek appropriate professional advice or consult an authorised insolvency practitioner.

You will find the relevant law in the Limited Liability Partnerships Act 2000, the Insolvency Rules (Scotland) 1986, and in the Limited Liability Partnerships (Scotland) Regulations 2001 which apply parts of the Companies Act 1985 (as amended in 1989 and later) and the Insolvency Act 1986 to limited liability partnerships.

1. What are insolvency proceedings?

These are formal measures to deal with debts of limited liability partnerships. Many different types of insolvency proceedings apply to limited liability partnerships. All are covered in this information.

2. Do all limited liability partnerships have to go through insolvency proceedings before being dissolved?

No. If the Registrar has reason to believe that a limited liability partnership is not carrying on business or is not in operation, he may strike its name off the register and dissolve it without going through liquidation. A limited liability partnership that is not trading may apply to the Registrar to be struck off the register. This procedure is not an alternative to formal insolvency proceedings.

More information about striking off and dissolution of a limited liability partnership is given on our main site.

3. Can anyone supervise insolvency procedures?

All liquidators, administrators, administrative receivers and supervisors taking office on or after 29 December 1986 must be authorised insolvency practitioners.

Receiver managers and Law of Property Act (LPA) receivers do not have to be authorised.

Insolvency practitioners may be authorised by:

1. the Chartered Association of Certified Accountants;
2. the Insolvency Practitioners’ Association;
3. the Institute of Chartered Accountants in England and Wales;
4. the Institute of Chartered Accountants in Ireland;
5. the Institute of Chartered Accountants in Scotland;
6. the Law Society;
7. the Law Society of Scotland; or
8. the Secretary of State for Trade and Industry.

4. What happens to the members of an insolvent limited liability partnership?

The liquidator, administrative receiver, administrator or Official Receiver has a duty to send the Secretary of State a report on the conduct of all members who were in office in the last three years of the limited liability partnership’s trading. The Secretary of State has to decide whether it is in the public interest to seek a disqualification order against a member.

Examples of the most commonly reported conduct might include:

1. continuing to trade when the limited liability partnership was insolvent;
2. failing to keep proper accounting records;
3. failing to prepare and file accounts or make returns to Companies House; and
4. failing to send in returns or pay to the Crown any tax that is due.

Tags: insolvency, llp