If the business is a solvent partnership then it can be dissolved by agreement between the relevant parties in accordance with the partnership agreement. However, if the business partnership is insolvent and cannot pay its debts then it will either go in administration, liquidation or a partnership voluntary arrangement ('PVA').
There are two types of partnership, the first is a partnership where all of the partners are jointly and severally liable for the debts and the other is a an LLP where there is limited liability.
In the case of an insolvent partnership needing dissolution the usual route is liquidation. In more urgent situations administration can be used as it is a faster option. It is also very useful where a business can be rescued as it stops all legal action such as the bank appointing a receiver.
For a normal (non LLP) partnership the partners are all jointly and severally liable for the debts not paid for by the partnership assets. This can have serious implications for the individual partners which might mean that a PVA is a better route and could possibly mean individual voluntary arrangements (IVA) for the partners.
If you need insolvency advice the earlier you talk to someone like us the better as you are likely to have more options available. We can help so contact us today on 0800 331 7417