An Insolvency Practitioner, also known as an IP, is someone licensed and authorised to act on behalf of and provide advice to companies, organisations and individuals when they are facing financial difficulties.
Licensed IP’s can advise on all formal insolvency procedures including liquidations, company voluntary arrangements, administrations, receivership’s, bankruptcy and individual voluntary arrangements.
In order to become a licensed insolvency practitioner, an individual must pass the Joint Insolvency Examination Board (JIEB) set of examinations and have also acquired in-depth professional experience providing them with a working understanding of the law relating to insolvency and how it is applied.
Authorisation to become a Licensed IP is subject to being considered fit and proper by one of the recognised professional bodies.
At Simply Corporate our IP’s are regulated and licensed by the Insolvency Practitioners Association to take insolvency appointments in the UK.
What are the duties of an insolvency practitioner?
An IP’s roles vary widely and are dependent on the position of the company they are working with. As well as acting as an advisor to company directors, an IP’s roles include;
• Providing professional advice to try to prevent insolvency
• Negotiating with the creditors, and other parties, of a company or individual
• Taking steps to preserve jobs and rescue companies where possible
• Realising the assets of a company for the best possible return to creditors
• Carrying out all statutory duties as required by law
• Providing regular reports to creditors on the progress of insolvency procedures
An insolvency practitioner can manage any of the following formal insolvency procedures;
• Administrations
• Bankruptcy
• Winding up Petitions
• Company Voluntary arrangements
• Creditors’ Voluntary Liquidation
• Individual Voluntary Arrangements
• Members’ Voluntary Liquidation
Who appoints the IP?
An insolvency practitioner can be appointed by a creditor or the courts but usually an IP is approached by a Director whose company is experiencing cash flow problems or who is seeking help in dealing with the threat of legal action from creditors.
Consulted at an early stage an IP can offer advice and help negotiate with creditors with a view to rescuing a business, or if that’s not possible, assist in closing it down in an orderly and timely manner.
When is the right time to contact an Insolvency Practitioner?
We realise that due to how the insolvency profession has portrayed itself over recent years that people find the thought of speaking to an insolvency practitioner very daunting!
People have an incorrect pre-conception that insolvency practitioners are the last resort, the end of the line, assisting only with liquidation or bankruptcy.
The earlier an insolvency practitioner is contacted, the greater the chance of business survival and avoiding insolvency.
Conclusion – Act quickly!
If your business is struggling financially speed is of the essence and it is key to seek our advice as soon as any warning signs have been spotted.
Whilst every company’s situation is unique, Simply Corporate have the experience and expertise to advise on all conceivable scenarios. Acting without delay allows for a wider range of options to be considered which provides a better chance of survival!