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What is an Insolvency Practitioner?

An insolvency practitioner (Licensed Insolvency Practitioner) is authorised to carry out formal insolvency procedures for company directors, companies and individuals. They are often referred to as an IP. 

An IP works with directors when a company is in financial trouble. They look at all the options available, including rescue options. So if you decide that insolvency advice is required, numerous options exist depending on the company’s future viability.

The advice helps with insolvency procedures, which helps 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.

Licensed Insolvency Practitioners:- 

  • Offer advice and guidance to directors and stakeholders of insolvent or otherwise financially distressed companies, and once appointed:
  • 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, 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; 
  • directors of a financially distressed company. 

Whoever initiates an insolvency procedure, then remains liable for paying the fees. 

However, if a creditor initiates any insolvency proceedings against a company, the director receives a Winding Up Petition initiating the company’s compulsory liquidation.

Usually, however, the director 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 creditors, no matter if the director appoints).

IP’s offer guidance to directors, but will always ensure that creditors’ interests are protected.

Does Insolvency Practitioner Services 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. 

The subject is more to the age of trading business and how directors remunerated themselves. Then use redundancy claim, once liquidated.

CVAs have a monthly supervisor’s fee lasting the time of the CVA. The fee is part of the approved monthly contribution amount. The insolvency practitioner takes the amount, therefore, reduces the balance remains for the company creditors. The creditors then agree to the supervisor’s fees.

Qualifications of an insolvency practitioner?

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 the history of the [email protected] can be sought on line as to fines and any disciplinary action.

Our Insolvency Practitioners are regulated by the Insolvency Practitioners Association.

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);
  • The Institute of Chartered Accountants in England and Wales (ICAEW);
  • Institute of Chartered Accountants in Scotland (ICAS).

The Governing bodies conduct and compliance of individual practitioners. If they consider the individual is not a fit and proper person to continue in practice, they will consider revoking the licence and even issuing 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 operate as an insolvency specialist, though neither qualified nor insured.

We list the 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 are 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 in assisting directors and companies across the UK.

So, check the qualifications before asking for help.

Extreme care is required when choosing the correct insolvency practitioner.

Verification then is simple. View the Insolvency Service Website.

Why use an Insolvency Practitioner?

Insolvency practitioners in the UK provide licensed help to company directors by helping rescue businesses, while overseeing the orderly wind-down of insolvent companies, allowing money to be paid to creditors in the event of insolvency.

Common instances for seeking their help is when your business:

Then 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? (Free insolvency advice for companies)
  • 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.

Our team is always willing to provide advice. All matters relating to formal Insolvency remain confidential advice. So ensure you let us know your problems down to outstanding court claims. However, only then may you review all debt solutions, ensuring you are given the best business rescue advice.

During the Coronavirus Covid19 pandemic (See how an Insolvency Practitioner help in pandemic), the UK government has implemented various schemes to assist companies and ensure jobs are saved hopefully. For further help, view our website further, which explains how in more depth.

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