Creditors’ voluntary liquidation of a Limited Liability Partnership — 2022
Produced in partnership with Andy Taylor of Isadore Goldman Limited and Emma Knight and Michael Smith of Three Stone
Last updated on 09/08/2022

The following Restructuring & Insolvency practice note produced in partnership with Andy Taylor of Isadore Goldman Limited and Emma Knight and Michael Smith of Three Stone provides comprehensive and up to date legal information covering:

  • Creditors’ voluntary liquidation of a Limited Liability Partnership
  • Applicable legislation
  • Contrast with conventional partnerships
  • Putting an LLP into CVL
  • LLP determines that it is to be wound up voluntarily
  • Moving from administration to CVL
  • Powers of the liquidator
  • Antecedent transactions
  • Obligations and liabilities of members
  • Joint and several liability of members for tax debts

Creditors’ voluntary liquidation of a Limited Liability Partnership

This note explains how a Limited Liability Partnership (LLP) can be placed into creditors’ voluntary liquidation (CVL), what powers the liquidator has, and what the members’ obligations are. This Practice Note does not apply to Limited Partnerships, for which, see Practice Note: Limited partnerships and insolvency—key principles.

Applicable legislation

The Limited Liability Partnerships Act 2000 (LLPA 2000) introduced LLPs and must be read in conjunction with the Limited Liability Partnerships Regulations 2001 (LLPR 2001), SI 2001/1090. The LLPR 2001 apply the Insolvency Act 1986 (IA 1986) and the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, to LLPs.

The IA 1986 only applies to LLPs registered in Great Britain.

The LLPR 2001 explain how the IA 1986 and IR 2016 apply to LLPs and clarify the following matters:

  1. references to a company include references to an LLP

  2. references to a director/officer include references to a member of an LLP

  3. references to the articles of association of the company include references to the limited liability partnership agreement of an LLP

  4. ‘contributory’ means every present and every past member of the LLP who is liable to contribute to the assets of an LLP in the event of its being wound up

The modifications set out in LLPR 2001, Sch 3 apply to the IA 1986. As LLPR 2001, reg 5 explains how words

Related documents:
Key definition:
Voluntary liquidation definition
What does Voluntary liquidation mean?

Liquidation not involving the court, either members voluntary liquidation (MVL) for solvent companies, or creditors voluntary liquidation (CVL) for insolvent companies.

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