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What does an insolvency practitioner do?

What does an insolvency practitioner do Umbrella.UK Insolvency

What does an insolvency practitioner do Umbrella.UK Insolvency

Licensed insolvency practitioners provide a range of services to individuals and companies when they are struggling financially.

If your company is experiencing financial distress, a licensed insolvency practitioner can help you find the best solution that works for you, your shareholders and any creditors.

What’s the role of an insolvency practitioner?

Insolvency practitioners are qualified to deliver a range of insolvency procedures to companies and individuals.

They can help struggling companies wind up operations or tackle debt through procedures including a creditor’s voluntary liquidation (CVL), company voluntary arrangement (CVA) or a company administration.

An insolvency practitioner may also help an individual with personal debt using procedures like an individual voluntary arrangement (IVA) or bankruptcy.

Insolvency practitioners must be qualified and licensed by a recognised body. They usually work for accountancy practices or specialist insolvency service providers. In practical terms, insolvency practitioners are nearly always trained accountants.

An insolvency practitioner can fulfil a number of official roles depending on what type of work they’re carrying out. If an insolvency practitioner is appointed to help shut down a company, they fulfil an official role as liquidator. An insolvency practitioner can also act as an official supervisor in CVA cases and as an administrator or administrative receiver during company administration proceedings.

Insolvency practitioners carry out their roles in accordance with the Insolvency Act 1986. This means, as well as their duties to directors and employees, insolvency practitioners also have a responsibility to work on behalf of creditors, protecting their rights during any insolvency proceedings.

Insolvency practitioners also play an important role in tackling fraud. Each year, approximately 1,200 directors are disqualified as a result of the work of insolvency practitioners and other agencies.

When should you contact an insolvency practitioner?

There are a few times when you should contact an insolvency practitioner:

  • If your company is insolvent, meaning it can’t pay its debts. If you aren’t sure if your company is insolvent then an insolvency practitioner can help you work it out.
  • If your company is facing acute financial distress. Financial distress is often caused by rising fixed costs or a loss of income. If your company is not insolvent, but is facing financial difficulties then an insolvency practitioner can help you plan for the future. Generally speaking, the sooner you contact an insolvency practitioner, to more they can help.
  • If you want to close a solvent company and liquidate any assets in the most tax efficient way possible. This is usually done through a member’s voluntary liquidation (MVL).

For more information about insolvency practitioners and to find out if you could benefit, speak to a member of the team today. Call: 0800 611 8888.