Cryptic crossword clue
One hangs around in formal situation, possibly making a bow 7

The most common and most likely answer to this crossword clue is the 7 letter word NECKTIE

I've seen this crossword clue in Independent
N
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Buddy explains!

The straight part
We know that "One hangs around in formal situation, possibly making a bow" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case one hangs around in formal situation, possibly making a bow = necktie.
The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.
This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.

What does NECKTIE mean?

NECKTIE noun
  1. A strip of cloth worn around the neck and tied in the front. See also bowtie.

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