Limited Liability Partnership Administration Orders in Scotland
Statutory Matters January 21st, 2009
An administration order is a court order made to appoint an administrator to manage the limited liability partnership’s affairs.
What is the purpose of an administration order?
Its purpose may be to:
- save the whole or any part of the limited liability partnership as a going concern; or
- approve a limited liability partnerships voluntary arrangement; or
- sanction (agree to) a compromise or arrangement; or
- get a better price for the limited liability partnership’s assets or otherwise realise their value more favourably than in a winding-up.
When may a court make an administration order?
A court may make an administration order when the limited liability partnership is, or is likely to become, unable to pay its debts and the court considers that the making of an administration order could achieve one of the purposes outlined above.
Who may make a petition for an administration order?
This may be done by the limited liability partnership itself, or one or more of its creditors including any contingent (existing) or prospective creditors. The administrator appointed by the order must notify the Registrar of the order.
What is the effect of the order?
While an administration order is in force, the limited liability partnership cannot be wound up and an administrative receiver cannot be appointed or, if previously appointed, they must vacate office. There are restrictions on enforcing any security over the limited liability partnership’s property, selling any goods and starting any legal proceedings.
Who must an administrator notify of his or her appointment?
An administrator must:
- Advertise the order in the Edinburgh Gazette and in a newspaper in the area where the limited liability partnership has its principal place of business; and
- send a copy of the court order to the Registrar with Form 2.2(Scot).
| What is the Edinburgh Gazette?
The Gazette is published by The Stationery Office and contains various statutory notices and advertisements. It is published twice weekly and can be obtained from The Stationery Office, 73 Lothian Road, Edinburgh EH3 9AW. |
What are the administrator’s duties?
The administrator takes control of all the property to which the limited liability partnership is, or appears to be, entitled. He or she prepares proposals for achieving the purpose for which the administration order was made and calls a meeting of creditors to consider those proposals. If the majority of creditors approve the proposals, the administrator then manages the affairs, business and property of the limited liability partnership in accordance with the proposals.
Does the administrator need to send anything else to Companies House?
Yes. The administrator must send details of the proposals within three months after the order was made.
Then, every six months, the administrator must send an account of receipts and payments.
How long does an administration order last?
It continues until the court discharges it - in other words, decides that the order is no longer needed.
If there is a court order to discharge the order, or to vary its terms, the administrator must send a copy to the Registrar within 14 days after the order was made.
Which forms should be used?
The appropriate forms are:
| Form title |
Number |
| Notice of petition for administration order |
2.1(Scot) |
| Notice of administration order |
2.2(Scot) |
| Notice of discharge of administration order |
2.4(Scot) |
| Notice of statement of administrator’s proposals |
2.7(Scot) |
| Notice of result of meeting of creditors |
2.8(Scot) |
| Administrator’s abstract of receipts and payments |
2.9(Scot) |
| Notice of variation of administration order |
2.12(Scot) |
Tags: administration order, llp
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