When dealing with insolvency, it’s necessary to bring in the services of an insolvency practitioner to oversee the formal aspects of the process. This is a role defined in law and not something that can be done by just anyone.
Who Can Be an Insolvency Practitioner?
Insolvency practitioners are a regulated profession as defined by the Insolvency Act of 1986. Only a licenced practitioner is allowed to oversee the insolvency procedures for a business in the UK. Many insolvency practitioners come from legal or accountancy backgrounds, but there are options for direct entry into the role as well. Anyone who practices in this area needs to have passed their JIEB (Joint Insolvency Examinations Board) exams.
Once the exams are passed, it’s necessary to become licensed by one of a group of professional bodies, which include the ICAEW, the Law Society of Scotland, and the Insolvency Practitioners Association.
What Do Insolvency Practitioners Do?
The range of duties undertaken by an insolvency practitioner in relation to insolvent individuals or companies is wide. However, their principal duties and loyalties lie with the insolvent entity’s creditors.
This may not necessarily be all about closing a company down. Sometimes the insolvency practitioner might be charged with negotiating a survival deal with the creditors in order to rescue the company. At the other end of the spectrum, they may be called upon to run the company prior to closing it down. Alternatively, the practitioner’s role may just be to offer advice to a company experiencing difficulties or act as a full-blown liquidator.
A Duty of Care
It’s in the nature of the job that insolvency practitioners are often dropped into high-stress situations. Their defined responsibilities are largely legal and financial, but there’s a human side to the role as well. They need to balance the interests both of the creditors and the debtors in order to reach the most satisfactory conclusion.
In practice, the primary aim of insolvency practitioners is to obtain the best price for company assets and the maximum recompense for the creditors. They will, where possible, seek to sell off the company as a going concern, as that is usually the way of achieving the highest value from the transaction. But, if this fails, they’ll need to sell off the assets piecemeal.
Once disposal is complete, it’s the insolvency practitioner’s duty to investigate the affairs of the company and its directors in order to establish what went wrong, and apportion blame if necessary.
Who Do I Call?
Your company needn’t be at death’s door to require the services of an insolvency practitioner. Indeed, it’s better for all concerned to get some assistance before insolvency becomes a problem. It’s always better to act prematurely, as delayed action could come back to haunt you after your company’s dissolution.
If things are tight and you’re worried about how long you’ll be able to pay the bills, contact Irwin Insolvency and we’ll do whatever we can to help you head off the worst.