Partnership Administration Order
When a partnership encounters financial difficulty, it can be put into administration by the partners or a creditor. This is called a Partnership Administration Order, or ‘PAO’. At BRI Business Recovery and Insolvency, we are a committed team of experienced professionals and insolvency practitioners and can help you and your partnership when it comes to PAOs.
Contact our dedicated team for more information.
About Partnership Administration Orders
The court will only grant the Partnership Administration Order where it is satisfied that the partnership is unable to pay its debts and where one of the following can be achieved:
- The rescue of the partnership as a going concern
- The agreement to a Partnership Voluntary Arrangement (‘PVA’) under which the debt can be restructured
- To provide a better return to creditors than would be possible via a winding up/liquidation
When the PAO is Granted
Where a partnership administration order is granted, an administrator – such as BRI Business Recovery and Insolvency- is appointed who takes control of the affairs of the business. Creditor action to recover debts from the partnership are prevented so as to protect the business from any harm whilst in administration.
The administrator works with the partnership to achieve a rescue or restructure so that the business can be handed back to the partners or to achieve one of the other two purposes of the Partnership Administration Order.
When is a Partnership Administration Order the Best Choice
When it comes to financial distress and potential administration in any business, it can be a very difficult decision for the business owners. Equally, when you are working in a partnership and cannot continue without formal insolvency advice, it can be particularly hard to decide if you are making the right decision because it isn’t just your business and livelihood at stake but that of your partners, too. At BRI Business Recovery and Insolvency, we understand how difficult it can be to let go of a business you have put so much blood, sweat and tears into.
For a PAO to take place, all partners individually must be solvent.
The key benefits of going down the PAO route are;
Rescue Opportunities – the PAO can allow the partnership to continue trading. It can be a lifeline and an opportunity for a struggling partnership.
Business Protection – during the order, creditors are prevented from taking legal action against the partnership, which gives them time to implement a rescue plan and take proactive action.
Maximise the Value of the Business – the insolvency practitioner will work to maximise the value of the business and its assets, which would make a more favourable outcome for everyone involved.
Working with BRI as your POA Administrator
At BRI, we can act on your behalf as your administrator. We communicate with all the relevant parties to ensure the order is sought as swiftly as possible and likely to achieve one or more of the purposes. If you find your partnership in financial difficulty, make sure you contact our team. We can discuss all the options and create a plan that suits you.
Contact us if you would like further information and assistance regarding any aspect of recovery or insolvency for your business. There is no charge for doing so, and it is without obligation.