Charging partner interest for personal debt PA 1890 s. 23
Creditors cannot seize partnership assets for an individual partner's personal debt. PA 1890 s. 23 allows a charging order over their profit share.
A writ of execution shall not issue against any partnership property except on a judgment against the firm. The High Court, or a judge thereof, . . . or the county court in England and Wales or a county court in Northern Ireland, may, on the application by summons of any judgment creditor of a partner, make an order charging that partner’s interest in the partnership property and profits with payment of the amount of the judgment debt and interest thereon, and may by the same or a subsequent order appoint a receiver of that partner’s share of profits (whether already declared or accruing), and of any other money which may be coming to him in respect of the partnership, and direct all accounts and inquiries, and give all other orders and directions which might have been directed or given if the charge had been made in favour of the judgment creditor by the partner, or which the circumstances of the case may require. The other partner or partners shall be at liberty at any time to redeem the interest charged, or in case of a sale being directed, to purchase the same. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . This section shall not apply to Scotland.
Text in force at .
Source: legislation.gov.uk — The National Archives (legislation.gov.uk), reproduced under licence Open Government Licence v3.0.
What it actually says
A personal creditor of an individual partner cannot seize or enforce judgment against property belonging to the partnership. Assets owned by the firm are protected from being taken to satisfy debts owed solely by an individual partner.
Instead, a creditor who holds a judgment against a partner can apply to the court for a charging order. This places a financial charge over that partner's share of the partnership profits and any other money due to them from the firm. The court may also appoint a receiver to collect those payments directly for the creditor.
The other partners have the right at any time to pay off the debt to clear the charge, or to purchase the partner's share if a sale is ordered. This provision applies in England, Wales, and Northern Ireland, but does not apply to Scotland.
When it applies
- A personal debt collector tries to seize a vehicle owned by the firm to satisfy a loan owed by only one partner.
- A creditor applies for a court order to divert a partner's annual distribution of profits directly toward an unpaid personal judgment.
- The remaining partners decide to pay off a charging order secured against their co-partner's share to keep outside parties away from business assets.
What this section does not say
- Debts incurred by the partnership firm itself, which can be enforced directly against partnership property.
- Enforcement against partnership property in Scotland, which is explicitly excluded from this section.
- The legal rules for dissolving the partnership when a partner's share is charged, which are set out in pa1890s.33.
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This page reproduces the text of PA 1890 s. 23 in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in England and Wales.