Limited Liability Partnerships will be subject to new insolvency rules from 8 December 2017
In 2016 the Insolvency (England and Wales) Rules 2016 (“IR 2016”) came into effect and replaced the Insolvency Rules 1986.
The government has now passed secondary legislation, the Insolvency (Miscellaneous Amendments) Regulations 2017 (“Regulations”) which will come into force on Friday 8 December 2017.
The regulations will address omissions, ambiguities and errors in insolvency legislation following recent legislative changes and in particular the introduction of IR 2016.
A number of changes are introduced by the regulations, including:
- Limited Liability Partnerships (LLPs) will become subject to IR 2016;
- The Limited Liability Partnership Regulations 2001 will be amended to reflect updated procedures for companies introduced by IR 2016. This includes for example the introduction of decision procedures as the default mechanism by which creditors will take decisions in insolvency proceedings for LLPs;
- The Insolvent Partnerships Order 1994 will be amended to:
a. confirm that IR 2016 apply to partnerships;
b. reflect the updated provisions of the Company Directors Disqualification Act 1986;
c. apply decision-making procedures to partnerships;
d. align bankruptcy provisions for partners with personal bankruptcy (by, for example, increasing the minimum amount a partner must owe in order to be subject to bankruptcy proceedings from £750 to £5,000); and
- Prescribing information to be filed with the Registrar of Companies in relation to the appointment of a liquidator in a CVL and the removal from use of Form 600.
Other amendments include those relating to the rules applicable to deceased insolvent estates and certain cross border insolvency matters.
Please remember that it is important to take specific legal advice in relation to your own particular circumstances.
John Bradshaw is a partner and head of the Business Services department at Barker Gotelee Solicitors.