Insolvency PractitionerWhat is an Insolvency Practitioner?
If you are seeking insolvency advise or you are considering liquidating your company, you will need the services of a qualified and licensed insolvency practitioner. They are qualified individual, usually an accountant or a solicitor who is trained in dealing with insolvency cases.
What Is An Insolvency Practitioner
An insolvency practitioner, also known as an IP, is a licensed professional who works with individuals or directors of financially distressed limited companies who need advise on a wide range of insolvency procedures that include Individual Voluntary Agreements (IVAs), Bankruptcy, Company Voluntary Arrangement (CVA), Creditors’ Voluntary Liquidation (CVL) etc.
An insolvency practitioner can provide advice to any individual who is struggling with personal debts on the best possible debt solutions available.
An insolvency practitioner typically works in a legal or accountancy firm in the insolvency department or at a company that specialises in insolvency.
The exact role and duties of an IP may vary depending on several factors but generally, IPs act as trustees in individual insolvency cases, nominees and supervisors in Company Voluntary Agreements (CVAs) or as liquidators in shutdown liquidation cases.
An insolvency practitioner may also provide guidance and advise to stakeholders and directors of financially distressed or insolvent companies.
Once appointed, they assume the role of negotiating with the creditors, take charge of the valuation and disposal of assets and also ensure that all outstanding company matters are handled in accordance with the law.
Appointment of An Insolvency Practitioner
An IP may be appointed by the courts, creditors or by the directors of an insolvent or distressed company. All the associated fees will be paid by the party who formally initiates the insolvency process.
In most cases, company directors often opt to consult an insolvency practitioner first so that they can take charge of the entire process. It is important to note that even if the insolvency practitioner is appointed by the company directors, he or she will work in the best interests of the creditors while still providing help and guidance to the directors of distressed companies.
Cost of An Insolvency Practitioner
The cost of an insolvency practitioner may vary depending on the type of debt solution procedure. The cost of an IP will typically be met using proceeds from the company assets that include stock, vehicles but in cases where assets are either non-existent or insufficient, company directors may be required to pay for this fee out of their own personal funds.
Qualifications of An Insolvency Practitioner
While most insolvency practitioners come from an accountancy or legal background, some begin their career in insolvency. However, for one to become a licensed IP he or she must pass the Joint Insolvency Examination Board (JIEB) exams that consists of two papers. One deals with corporate insolvency matters while the other is mainly about personal insolvency. This exam basically tests an individual’s knowledge and comprehension of the insolvency law and how they can put it into practice.
On top of passing these exams, an individual must gain some hands-on experienced before being issued with a license to take up insolvency appointments. Licensed insolvency practitioners are overseen by a regulatory board that ensures that high standards of integrity and professionalism are upheld.
The activities of IPs are regulated by a number of recognised professional bodies that include the Insolvency Practitioners Association (IPA), the Association of Chartered Certified Accountants (ACCA) and the ICAEW.
An insolvency practitioner is subject to regular inspections by his or her respective licensing body. In cases where the work of an insolvency practitioner is deemed to be substandard, their license may be revoked. You can find a licensed insolvency practitioner near you through the Insolvency Service website or alternatively, your accountant or solicitor may recommend you to one whom they share a good working relationship.