This part of the chapter deals with petitions against partnerships and their members. They are administered under the Insolvency Act 1986 with modifications under the Insolvent Partnerships Order 1994. Insolvent partnerships are wound up as unregistered companies under Part V of the Insolvency Act 1986 but the Act is modified differently by the Insolvent Partnerships Order depending upon the particular route chosen by the petitioner.
The initial choice by the petitioner is:
a. taking insolvency proceedings only against the partnership without presenting concurrent petitions against any of the members;
b. taking proceedings against both the partnership and one or more partners; or
c. taking proceedings only against the partners.
Sections of the Insolvency Act which have been modified by the Insolvent Partnerships Order 1994 are highlighted on the notes pages where appropriate.
(Amended October 2010)
Where a partnership has a name, unless it is inappropriate to do so, claims must be brought in or against the name under which that partnership carried on business at the time the cause of action accrued [Note 1]. In the High Court partners must acknowledge service in their own names although the action will continue in the name of the firm. The action is against those who were partners when the cause of action arose including those who have retired or have been expelled and the estates of deceased partners. An incoming partner cannot be sued on a cause of action which arose before he joined unless he has agreed with the claimant that he will be liable [Note 2] or he agreed on joining to accept former liabilities, in which case he could be joined in as a third party.
Where a claimant knows that there has been a dissolution of the partnership through the departure of a partner, the claim form must be served on each person whom it is sought to make liable in the action (even where the claim is issued in the name of the firm). If the claimant does not serve a former partner, that partner cannot later be liable to execution against his personal assets for the debt, though he may be liable to an action by his former partners [Note 3].
No insolvent partnership can be voluntarily wound up under the Insolvency Act [Note 4].
No petition dealing with insolvency proceedings against a partnership which involves the winding up of the partnership business as an unregistered company and concurrent petitions against members may be presented in the District Registry of the High Court [Note 5].
Article 17, Schedule 9 of the Insolvent Partnerships Order contains
statutory forms for the statutory demand, various forms of petition, advertisement of the petition and affidavits necessary to wind up partnerships and for petitions against individual members.