Enterprise Act 2002 - Partnerships
Comments from ACCA
7 March 2003
Thank you for sending us the consultation paper on the above.
We support the proposal to extend the new administration provisions of the Enterprise Act 2002 to insolvent partnerships. The proposed extension of the standard company-orientated provisions seem satisfactory.
Our only query relates to the new, out of court route for appointing an administrator. In paragraph 3.4.15 of the consultation paper, it is proposed that 'one or more of the partners should be able to appoint an administrator in the same way that a director will be able to appoint an administrator'.
Under paragraph 22 of the new Schedule B1 to the Insolvency Act 1986, authority to appoint an administrator rests with the company or its directors (acting as a body): there is no provision for individual directors to make the appointment. In the partnership context, there should be no statutory power for an individual partner to make such an appointment since it is of course possible for persons to be partners without any authority to take part in the firm's management. The partnership must, therefore, be given only a collective authority to make the appointment. We suggest in fact that there is no need to make a parallel differentiation, for partnerships, between sub-paragraphs (a) and (b) of paragraph 22., given that any decision of the partners collectively is effectively the decision of the partnership.
With regard to the extension of the standard provisions regarding processes and time-scales, we assume that this will be subject to the usual contextual modifications.