What is an Insolvency Practitioner?
What will they do for me and my company?
Contact HBG Advisory for advice.
"In trust yeh place"
WHAT IS AN INSOLVENCY PRACTITIONER?
Anyone in the role of a liquidator, administrator, administrative receiver and supervisors taking office, is to be a licensed insolvency practitioners.
If in the position of acting as a receiver-manager, Law of Property Act (LPA) receivers and nominees appointed to manage a company voluntary arrangement moratorium, then that person is not required to be authorised.
Insolvency practitioners are authorised by:
- Institute of Chartered Accountants of England and Wales
- Association of Chartered Certified Accountants
- Insolvency Practitioners’ Association
- Institute of Chartered Accountants in Ireland
- Institute of Chartered Accountants in Scotland
WHAT IS THE ROLE OF AN INSOLVENCY PRACTITIONER?
As with many professions, the role of an insolvency practitioner varies depending on the type of appointment they are engaged for.
Insolvency practitioners may be appointed to act as nominees and supervisors while managing a company that appointed the IP to control a Company Voluntary Arrangement (CVA),
- They may be appointed to act as a liquidator in a creditors voluntary liquidation,
- and as an administrator in a company administration.
An insolvency practitioner provides directors of distressed and insolvent companies with Licensed advice and guidance. Once they are appointed, they negotiate with the creditors of the failing company while arranging for the assets of the company to be valued and sold by an independent valuer., and ensure outstanding matters regarding the failed business are concluded as per the Insolvency Act,1986.
An insolvency Practitioner may also deal with the closure of companies that are solvent, known as a Members’ Voluntary Liquidation (MVL).
Who Appoints the Insolvency Practitioner?
Typically, they are appointed by a creditor, through the courts, or by directors of the failing company.
Whoever appoints the IP, is, therefore, responsible for the insolvency fees only.
In the case of a creditor, who will not wait. If they commence proceedings to recover monies owed from the company, then the company director will receive (served) a Winding Up Petition (WUP). This then kickstarts the process of the company being forced into compulsory liquidation
Usually, though, directors will avoid this and will call in an Insolvency Practitioner, ensuring they have initial control avoiding having it imposed upon them.
Take note. The insolvency Practitioner once appointed acts for the creditor’s interest.
An IP is required to have a licence and:
- passed the insolvency examinations (JIEB exams);
- be experienced in insolvency work;
- satisfied their authorising organisation, they are fit and proper to carry out the duties of an IP.
Licensed insolvency practitioners in the UK are profoundly regulated professionals with many layers of overlooking and supervision to which they are regularly inspected. Dealing with insolvent companies affairs is a technical function, therefore when asking advice, ensure you are being advised by a licensed IP or a member of their firm, and not a referrer. HBG Advisory experts are monitored by the Insolvency Practitioners Association, so by dealing with us, you are in insurance-backed hands.
HOW ELSE MAY AN INSOLVENCY PRACTITIONER HELP
Directors are usually fearful of meeting insolvency practitioners.
When setting up a new business, it is wise to consult with HBG Advisory. We can advise you on how to operate your business avoiding insolvency.
We list below key areas which perhaps you may not have considered or are unclear about:
- Business finance, How to secure it avoiding personal liability.
- How to deal with paying VAT late. How as a director are you exposed?
- HMRC Payment plans– How will the HMRC support your business when in a cash flow crisis?
- Creditor pressure – How to deal with it legally
- VAT Monthly – How do I account for paying VAT Monthly?
- What is a pre-pack liquidation?
- Personal Guarantees – What is the impact and can I get out of them?
- Tax arrears – Am I liable for company tax arrears
- Do I have to be VAT registered? – If so,when?
- What is Invoice Finance?
- How do I know if my company is insolvent?
- What are my company closure options?