Behind any firm that can offer personal and company insolvency services, there is a licensed Insolvency Practitioner or IP. When seeking advice on company insolvency or otherwise, you should always check that the firm has an insolvency practitioner working for them. The IP must be regulated by one of the professional bodies, such as the Insolvency Practitioners Association (IPA) orInstitute of Chartered Accountants of Scotland.
A licensed Insolvency Practitioner, or IP, is an individual authorised under the provisions of the Insolvency Act 1986, to deal with personal and company insolvency appointments.
Most IPs are accountants or insolvency specialists working in firms of accountants.
Licensed insolvency practitioners are brought in to resolve complex situations. Company insolvency is complicated, and, therefore, insolvency practitioners act in accordance with the rules set out in Insolvency Law.
The duties of an insolvency practitioner (IP) are wide and varied to suit the number of roles they can take on when dealing with individuals and businesses that require help. They offer advice regarding all aspects of insolvency including business finance and turnaround procedures.
A licensed insolvency practitioner will often be known under several different designations including:
- Trustee in bankruptcy
- Nominee or supervisor of a voluntary arrangement
While an insolvency practitioner will, generally, be approached by the directors seeking company insolvency advice or by a debtor, they have diverse roles. In all cases, they will usually start out by advising the stakeholders, moving to the point where they are overseeing the balance of interests of both parties. Their role involves acting solely for the creditors in instances of terminal company insolvency.
The statutory regulations of the Insolvency Act 1986 and Insolvency Rules 1986 will be followed and complied with by all licensed IPs throughout their work.
IPs are appointed to sort out difficult situations. In some cases, their main task is to try to rescue a business.
If it is not possible, the IP aims to:
- sell the assets of the person or company who owes money;
- collect money due to the person or company;
- agree creditors’ claims; and
- distribute the money collected after paying costs.
In some cases, the IP will give advice to a debtor immediately before a formal insolvency process begins.
As mentioned above, the challenges for an insolvency practitioner can vary depending on the situation, but can include:
- Providing professional advice to try to prevent insolvency
- Dealing with and potentially directly running any type of business
- Piecing together what went wrong in the company and reporting this to creditors
- Taking steps to preserve jobs and rescue corporations where possible
- Dealing with complex legal claims where there are parties whose actions contributed to the company insolvency
- Acting as a negotiating intermediary between debtors and creditors to find suitable repayment solutions to avoid insolvency
- Realising the assets of a company for the best possible return to creditors after marketing to a wide range of potential buyers
- Investigating company affairs and director conduct, where necessary, and file a report to the Insolvency Service.
How we can help
If you think you may need the services of an insolvency practitioner personally or believe your company may need financial help, it’s important to act quickly. We operate nationwide, offering face-to-face and virtual consultations helping businesses turnaround and recover.