What is an Insolvency Practitioner (IP)?
An insolvency practitioner – Licensed professional, authorised then to carry out formal insolvency procedures for company directors, companies and individuals.
An IP works with directors when a limited company experience financial difficulties. They look at all finance options along with rescue options available. If it is decided that insolvency advice is required, then options vary depending on the future viability of the company.
The advice revolves around insolvency procedures, which then assists limited companies.
Insolvency processes used in England and Wales for limited companies include:-
and then for individuals (personal insolvency):-
What then does an insolvency practitioner do?
Insolvency practitioners manage restructuring options such as:-
- Company liquidator in shut-down liquidation cases;
- nominees and supervisors in CVAs;
- as administrators;
- Administrative Receiver.
- offer advice and guidance to directors and stakeholders of insolvent or otherwise financially distressed companies and once appointed:
- then negotiate with creditors, arrange valuation and disposal of assets, and ensure outstanding company matters remain dealt with per the Insolvency Act 1986:
- HMRC Time to Pay.
IPs assist with the closure of solvent companies, ensuring cash extraction from the profitable business in a cost-effective way. The process is known as a Members’ Voluntary Liquidation (MVL).
Who then appoints an insolvency practitioner?
They can, therefore, be appointed by:-
- a creditor of the company;
- appointed by the courts;
- or directors of a financially distressed company.
Whoever initiates insolvency procedure then remains liable for paying the fees.
However, if a creditor commences any insolvency proceedings against a company, then, the director receives a Winding Up Petition initiating the process of the company enforcing compulsory liquidation.
Usually, however, it is the director who approaches an insolvency practitioner first, favouring control of the procedure rather than having a practitioner appointed on the company by creditors through compulsory liquidation. ( Insolvency Practitioners always work with the interest of creditors no matter if the director appoints.).
IP’s offer guidance to directors initially but will always then ensure creditors interests are protected.
Insolvency practitioner cost?
Costs, therefore, fluctuate depending on the procedure adopted. However, expect to pay around £4,000 for a CVL. Costs recovered by liquidating the company assets. However, in occurrences, where proceeds from the sale of assets are then deficient. Then directors, therefore, remain accountable for paying fees.
Subject then to the age of trading business and how directors remunerated themselves. Then use redundancy claim, once liquidated.
CVAs, have a monthly supervisors fee lasting the time of the CVA. The fee forms part of the approved monthly contribution amount. The insolvency practitioner takes the amount, therefore, reduces the balance remains for the company creditors. Then the creditors agree to the supervisor’s fees.
Qualifications of an insolvency practitioner?
To be able to practice as a licensed insolvency practitioner. Exams set by the Joint Insolvency Examination Board (JIEB Exams). Once passed, experience counts on dealing with complex issues and how commercially companies saved. Licences remain issued by various professional bodies and history of the [email protected] can be sought online as to fines and any disciplinary action.
Our Insolvency Practitioners are regulated by the Insolvency Practitioners and qualified Chartered Certified Accountants.
Our directors are members of R3 while our practice is a member of the Turnaround Management Association.
Insolvency practitioners – Are they regulated?
Corporate insolvency remains a highly regulated industry. A regulatory board supervises every individual licensed insolvency practitioner. Numerous professional bodies regulate insolvency practitioners, recognised professional bodies include:
- Insolvency Practitioners Association (IPA);
- Association of Chartered Certified Accountants (ACCA);
- The Institute of Chartered Accountants in England and Wales (ICAEW);
- Institute of Chartered Accountants in Scotland (ICAS).
The Governing bodies carry out inspections on conduct and compliance of the individual practitioners. If they consider that the individual is not a fit and proper person to continue in practice, then, they will consider revoking the licence and even issue fines.
Picking an insolvency practitioner?
Suppose contemplating liquidating your limited company, or seeking insolvency consultation. Then only approach a firm of licensed insolvency practitioners.
In the UK. Many trade as an insolvency specialist though is neither qualified nor insured.
We list below points you should consider when considering your choice of IP.
- Request upfront fees.
- Poor choice of professional agents, including valuers.
- The poor response once paid.
- Often initial advisor has limited knowledge on redundancy.
- Limited knowledge helping the directors’ on options available.
- Creditors not being dealt with correctly.
So then why choose HBG Advisory:-
- Our IP’s are regulated and Licensed Insolvency Practitioners in the UK with the Insolvency Practitioners Association.
- We have many years of experience assisting directors and companies across the UK.
So, check the qualifications before asking for help.
Verification then is simple. View the Insolvency Service Website.
Meet the Team
To view our IP’s check out The Team at HBG Advisory
Finding an Independent IP?
Often Accountants recommend IP’s. Take care.
- Ensure you note everything down you are told.
- Ask how much?
- If you have an overdrawn directors loan, understand your position.
- Ask to speak to previous clients.
- Has the IP’s a disciplinary track record.
- Explore all closure options.
- REMEMBER. TRUST IS IMPORTANT. IF YOU HAVE ANY DOUBTS, MOVE ON. MEET ANOTHER IP.
Our team are always willing to provide advice. All matters relating to formal Insolvency remain as confidential advice. So ensure you let us know your problems down to outstanding court claims. Only then may you review all debt solutions ensuring you are given the best business rescue advice.
During the coronavirus Covid19 pandemic, the UK government has put in place various schemes to hopefully assist companies and ensure jobs saved. For further help, view our website further which explains how in more depth.