Partnership and Bankruptcy

SIM

My wife is self-employed but runs a very small business with no assets. She is in a partnership with 2 others who have an equal interest in the business.

Would her going Bankrupt effect the business?

Could/should she remove herself from the partnership before declaring bankrupt?

She does other bits and bobs to make up her self-employed income. It's just that she is worried that if she goes Bankrupt, the business that she has a partnership with her friends will be effected. Like I said, it has no assets and doesn't really make much money at present.

Any help would be great?!

TheGardener

You need help from Business Debtline but yes - it probably would affect the partnership, particularly if there are joint accounts/financial links.

JCS1

The partnership.is dissolved when one of the partners is made bankrupt.

WhenIam64

The partnership.is dissolved when one of the partners is made bankrupt.

This one

https://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch49-60/Chapter%2053/Part%205/Part%205.htm#53.83

But see if there are exceptions built into the agreement (Partnership Act 1890 section 19) but unlikely if it was a small business.

Could/should she remove herself from the partnership before declaring bankrupt

It is most likely better for the remaining partners to agree to a dissolution and a reforming of a different partnership. That way the debts and liabilities of the first partnership could be crystallised for bankruptcy purposes. These debts would mostly likely be subject to a review by the OR if the debts were significant, to ensure the shares in the dissolution were equal