The main difference between a limited company and a business partnership, is that each partner is personally liable for the debts incurred both by themselves and their other business partners which means there is a greater risk if the partnership suffers financial distress. Needless to say financial difficulties can also put a strain on the relationships between the partners making things harder still.
Limited partnerships, which are less common, are made up of one or more members confusingly often still referred to as partners, these entities are far more analogous to companies than unlimited partnerships and if you are a partner in one of these please look at our options for limited companies here.
If an individual partner is facing personal bankruptcy, the partnership can find itself ceasing to exist causing yet further complications for all partners.
If the partnership itself is facing financial difficulties and the partners are unable to provide the funds to support it then a creditor has the choice to seek a winding-up order against the partnership and/or bankruptcy orders against any or all of the partners individually.
However, if dealt with soon enough there are potential remedies available to partners and the partnership including putting forward voluntary arrangements for all parties. These can, by their very nature be quite complex and if you are facing issues in this regard please get in touch and we would be happy to talk through the problems with you.