R3volved Blog What Do Insolvency Practitioners Do?

What Do Insolvency Practitioners Do?

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Whether you are looking for help to close your business or you are seeking advice about turning around a company in financial distress, the choice of the insolvency practitioner that you engage will have a major impact on the outcome of the process and your overall experience of it. This is why it is important to consider who you are engaging carefully, even if the recommendation of an accountant or another source has been given to you.

insolvency practitioners are licensed individuals who work with financially troubled companies and individuals in formal insolvency processes. They will be regulated by one of the recognised professional bodies (RPBs) and must adhere to the highest standards of professional behaviour and practice. In the most serious circumstances they may face regulatory sanctions including reprimands, fines or in some cases loss of their licence.

Understanding Insolvency Practitioners: Who They Are and What They Do

When an insolvency process is underway, they will work with the directors of a company to prepare a proposal for a Company Voluntary Arrangement (CVA) and distribute this to creditors. They will then act as supervisors in the CVA, collecting contributions from the company, making distributions to creditors and reporting annually on its progress. They will also manage any variations to the original CVA or winding up the company if that proves necessary.

Throughout the insolvency process, an IP’s decision-making will be based on what is in the best interests of all of the creditors. They will sell assets, liaise with creditors on behalf of the insolvent individual or company and, where appropriate, help them to come to an agreement on how their debts are restructured.

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