LLP liability for car lease
Discussion
If it's a Limited Liability Partnership and you didn't provide any partner guarantees then you won't be liable for the remainder of the lease (that's why it's limited liability).
If it's a PCP agreement in a limited liability partnership then the 50% rule doesn't apply (it'll be an unregulated agreement) - the finance company will probably just take the vehicle back in this instance. But if it is a purchase agreement of some sort rather than a lease, it will be worth obtaining a settlement figure and seeing whether you can sell the car for more than the outstanding finance.
If it's a PCP agreement in a limited liability partnership then the 50% rule doesn't apply (it'll be an unregulated agreement) - the finance company will probably just take the vehicle back in this instance. But if it is a purchase agreement of some sort rather than a lease, it will be worth obtaining a settlement figure and seeing whether you can sell the car for more than the outstanding finance.
Haibiker said:
Just dissolved a LLP of which I am the only partner. Am I liable for the remaining 20 months of a 48 month lease deal on a vehicle ? I think it's a PCP have to check. Seem to remember hearing you could hand vehicle back if you,vet done 50% of lease term...anyone experience of this ?
You're thinking of Voluntary Termination which is (was?) based on making 50% of the payment due - typically around 36 months into a 48 month, depending on term.Notwithstanding that, interested to see the answer to the main question here. I thought LLPs limited personal liability in the event of a business hitting the wall, rather than facilitating mooching on a PCP when dissolving.
If there is a termination payment due on early termination then that in all likelihood is a liability of the LLP. If the LLP fails to pay then the creditor could apply to turn the solvent dissolution into an insolvent liquidation which could get messy - e.g. clawing back distributions made by the partnership for the six months prior to dissolution etc. - did you not have to sign a declaration of solvency as part of the dissolution procedure?
In reality it depends how much you owe - they may not bother - but it is a fairly strong possibility if it is less than a negligible sum as some finance companies in particular like to get a reputation as being awkward precisely so that people dont do this! I once worked for a solicitors firm which had a couple of finance companies as clients who always presented petitions for insolvent winding up when the amount was above the statutory threshold (£750 from memory). Whether or not being a partner of an insolvent LLP is a problem for you depends on the industry that you are in but it could be a problem if you are in a regulated profession or want access to credit again via that route in the future.
In reality it depends how much you owe - they may not bother - but it is a fairly strong possibility if it is less than a negligible sum as some finance companies in particular like to get a reputation as being awkward precisely so that people dont do this! I once worked for a solicitors firm which had a couple of finance companies as clients who always presented petitions for insolvent winding up when the amount was above the statutory threshold (£750 from memory). Whether or not being a partner of an insolvent LLP is a problem for you depends on the industry that you are in but it could be a problem if you are in a regulated profession or want access to credit again via that route in the future.
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