Many insolvent companies are facing financial difficulty and these Insolvency Practitioners are those who are licensed to help these companies. Now the question is how they help them. Insolvency involves a lot of processes, such as at first one has to apply for bankruptcy. Want to know about the Insolvency Practitioner? Read this post till the end.
Understanding Insolvency Practitioner in Detail
For companies that are struggling, a licensed insolvency practitioner (IP) has a wide range of duties. In the first instance to try and rescue a business and keep it on track an insolvency practitioner can provide company directors with professional advice in pre-solvency situations. An IP could be appointed to take control of the company before closing it down at the other end of the spectrum where a company is insolvent.
Aim of Insolvency Practitioner
To rescue an insolvent company is the primary responsibility of an IP if it is in the best interest of the company’s creditors. They may be required to negotiate with the creditors to rescue a business depending on the insolvency procedure. Or before closing it down they make take complete control of the company. In this case, they will do any one of the following – agree on creditors’ claims, collect money owing to the company from debtors, sell company assets to repay creditors, distribute the money collected after the costs of insolvency have been paid.
Number of Insolvency Practitioners in the UK
There are currently 1735 licensed insolvency practitioners in the UK as of 2020. Maybe not all of them will be currently working in a role.
How do Insolvency Practitioners Work and How to Find them?
Acting as a professional intermediary in all the proceedings is the main role of the insolvency practitioners. They can achieve the goal they are working towards as this instills greater confidence in creditors, including HMRC. The code of conduct that provides professional and ethical guidelines must be abided by the insolvency practitioner in all roles. Hence while carrying out their statutory duties they must act with reasonable skill and care and balance the interests of the company with those of the creditors they must work to protect.
The insolvency partners then administer the procedure and become the liquidator of the company once an insolvency practitioner has determined that a company liquidation is the best course of action. Well, many insolvency service websites can find you a licensed practitioner or you can confer with your accountant for the same.
Appointment of Insolvency Practitioner
The following list of parties appoint the Insolvency Practitioner:
- Director of a Limited Company
- Creditors
- Secretary of State
- The Courts, following a Winding-up Order
Who is a Liquidator?
Liquidators and insolvency practitioners are not mutually exclusive. They cannot be the same thing and this is the most important thing to note. The company will have to appoint a licensed insolvency practitioner to undertake the work on their behalf if the company directors decide to liquidate the company. After receiving initial advice from an insolvency practitioner, the directors may decide liquidation is the best course of action.
The insolvency practitioner becomes the liquidator once the directors have appointed an insolvency practitioner to liquidate the company. Then collecting and selling the assets of the company, distributing the money to the company’s creditors in a specific order, and ensuring all creditor groups receive the highest possible dividend then becomes their job.
Can Only Insolvency Practitioners Act As Company Liquidator?
No, it is not only the insolvency practitioners that can act as the liquidators for the company. In a compulsory liquidation, an official receiver will be appointed by the court to liquidate the company, where a company is wound up by the court following a petition by a creditor. For acting as the liquidator the official receiver can appoint a private insolvency practitioner if their skills and resources are required. Alternatively if the company’s creditors the IP will better protect their interests, they can vote to appoint their insolvency practitioner to act as the liquidator.
Is a Liquidator an Insolvency Practitioner?
Yes, a liquidator is an insolvency practitioner as he is one of the several which is played by IP. Additionally in company rescue procedures such as administration or company voluntary arrangement IPs may be involved.
Conclusion
Well, the post has made the best possible effort to make you reach and know the insolvency practitioner from every corner. Many insolvency websites can help you well to apply for bankruptcy, file a personal insolvency agreements Australia, etc. You can also search for “insolvency practitioner near me” to get in touch with the best insolvency websites and find the best insolvency assistance.