Partnership Meetings

December 2008

Introduction 

1. What is a partnership?

A partnership is group of persons carrying on a business in common with a view to profit. 

2. What is a member of a partnership?

A member is one of the partners. A member can be an individual, a company or even another partnership. 

3. What is the official receiver’s position when an order is made involving a partnership?

In a partnership case, the official receiver’s status depends on the order(s) made:

  • Winding-up order made against the partnership only – official receiver is liquidator.
  • Winding-up order made against the partnership and bankruptcy orders against one or more partners – official receiver is liquidator of the partnership and trustee of the separate bankruptcy estates. (If one of the members is a company and a winding-up order is made against it, the official receiver will be liquidator of that estate also.)
  • Members presenting joint bankruptcy petitions, no winding-up order made against the partnership – official receiver is trustee of separate bankruptcy estates and of the partnership estate.

4. Must a meeting be called in every partnership case?

Unless an insolvency practitioner (IP) has been appointed by the court, the summoning of a creditor’s meeting is at the discretion of the official receiver but the decision on whether to hold a meeting must be made and notified to the creditors within 12 weeks from the making of the first insolvency order. That decision will be based on whether the official receiver considers that there are sufficient assets to merit the appointment of an IP having considered the guidance given in Technical Manual Chapter 17 paragraph 17.3

5. How many sets of notices must be issued?

(Amended Feb 2010)

One set of notices is prepared and issued, the creditors of both the separate and partnership estates being treated as one set of creditors for the purpose of the meeting. There are specific CAR A forms for use in partnerships which can be found under the “Forms to be Used” section below and can be accessed by clicking on the appropriate form.

6. Are the meetings forms different in a partnership?

(July 2010)

Generally, the forms to be used in a partnership case will be the same as for a company or bankruptcy as listed in the Case Help Manual parts: Meetings. There are, however, specific CAR A forms, gazette notices and notices for newspapers for use in partnership cases which can be found in the ‘Forms to be Used’ section.

7. Company or bankruptcy procedure?

Where there is a winding-up order only against a partnership without insolvency orders against any of the members, the meetings procedure will be the same as for a company creditors’ meeting, but please note that no forms are prepared for contributories.

Where there is a winding-up order against a partnership and an insolvency order against one or more of the partners, the meetings procedure will be the same as for a company creditors’ meeting, but please note that no forms are prepared for contributories.

Where there has been no winding-up order made against the partnership and a joint bankruptcy petition presented by individual members, the procedure will be as for bankruptcy. Generally, this is the most common form of members’ petition. 

8. Appointment of an Insolvency Practitioner

Where an IP is appointed in a partnership case, he/she will become responsible for all of the estates connected to that partnership - even those where there are no assets.

Notes

  • Care must be taken to ensure that the creditors are all recorded against the correct estate on LOIS as, although they are treated together for meetings purposes, they are treated separately for all other purposes.
  • If a previously solvent member of a partnership becomes the subject of an insolvency order after the partnership meeting has been concluded, the official receiver need not make a meetings decision. Any IP appointed at the meeting will also take over the "new" estate.

 

Where can I find out more?

The Insolvent Partnerships Order 1994

Technical Manual:

Chapter 16 – Meetings -Part 10 - Partnerships

Chapter 17 – Appointment by Secretary of State - Part 1 paragraph 17.3

Chapter 53 - Partnerships

Case Help Manual:

Meetings

Forms to be Used

Generally, the forms to be used in a partnership case will be the same as for a company or bankruptcy as listed in the Case Help Manual parts: Meetings. CAR A forms, the gazette notice and notices for newspaper for use in partnership cases can be found listed below.

CAR A (c1) (partnership) Article 7,8,9 or 10

CAR A (c1) (corporate member) Article 8 or 10

CAR A (b1) (member) Article 8 or 10

CAR A (b1) (partnership) Article 11

CAR A (b1) (member) Article 11

Gazette Notice - First Meeting - Partnership Case (debtors' petition)

Gazette Notice - First Meeting - Partnership Case (winding up only) 

Gazette Notice - First Meeting - Partnership Case (winding up and connected bankruptcies)  

NFN1- Partnership debtor's bankruptcy meetings  

NFN4 - Partnership liquidation Meetings 

NFN4 - Partnership liquidation and connected insolvency(ies) Meetings 

 

Partnership meeting Flowchart 

 

Procedure

LOIS screen references are given in brackets e.g. (DO73).

Please Note If instructions are given that there is to be no meeting, refer to Case Help Manual part: Meetings - No First Meeting.

1. Receive instructions that a meeting is to be held. The examiner will have saved an approved Report to Creditors (CAR A form) in a file on the Shared Drive.

2. Ensure that the lists of creditors are complete on LOIS (CA31) for every estate, including reference/account numbers and amounts due according to the information supplied in the PIQ/statement of affairs.

3. Arrange an appropriate date and time for the meeting to be held, ensuring that creditors will receive at least 14 days notice before the meeting date (where the petition is presented before 6 April 2010 you should allow 21 days). You should allocate a minimum of 21 days to allow sufficient time for posting, etc (where the petition is presented before 6 April 2010 you should allow 28 days). Check that the meeting will be held within 4 months of the date of the insolvency order. If not, apply to the court for an extension of time and await the return of the order from court before sending out the notices.

4. Prepare the Notice of First Meeting (NFM) on LOIS (DO73) stating the date and time of the meeting. Send this to all known creditors of all the estates with:

  1. the report to creditors (CAR A form)
  2. Proof of Debt form (POD) and
  3. Proxy form (PROXY).

5. Prepare and send form NMBO on LOIS (DO73) to the partnership and its insolvent members quoting the date and time of the meeting. Also state whether or not the partners and the insolvent members of the partnership are required to attend. The examiner will inform you of this.

6. Prepare the gazette notice and, if required, any other advertisement e.g. local newspaper (form NFN 4). Templates are available as Word documents and can be found in the ‘Forms to be Used section. For further information on this procedure please refer to Case Help Manual part: Publication of insolvency information.

7. Enter the meeting date and the date the notices were issued on LOIS (CA21) and diarise the meeting date.


After the notices have been sent

8. Deal with proofs and proxies as they arrive, ensuring that LOIS is updated regularly for all estates. (CA31)

The procedure in Case Help Manual part: MeetingsDay of Meeting can now be followed. Care must be taken that the correct forms are processed i.e. bankruptcy or company, depending on the status of the case.

IP appointed at meeting

9. Where an IP has been appointed at the meeting, ensure that consent to act has been received for each estate comprised in the insolvency. Only one will be needed if there is a winding up against the partnership only, otherwise there will need to be as many as there are bankrupt partners.

10. Note the IP’s appointment on LOIS (CA23). Then follow the procedure in the Case Help Manual part: Insolvency Practitioners- Handover to IP.