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If your business is experiencing a financial affliction or loss, you might be looking out for appointing an insolvency practitioner. These professionals aim to navigate you through these testing times.
However, you might be unsure of the roles and duties of the practitioner if hiring one for the first time. But, as a company owner, it is important for you to understand their roles and duties. The knowing part is even more important if your company is in the early stages of financial afflictions. That way you can better understand the value they add to your firm.
To help you through the process, we have listed everything you need to know about an insolvency practitioner and their contributions to a firm.
So, let’s get started with the Basics!
What is an Insolvency Practitioner?
An insolvency practitioner (IP) is a professional who is licensed to represent companies or an individual when they are facing finance-related problems or afflictions.
An IP is the one who helps owners of the solvent companies to liquidate their company through MVL (Members’ Voluntary Liquidation) to make the most of their profits. In most cases, a business owner voluntarily approaches an IP to deal with their financial matters.
Additionally, in the scenarios of compulsory liquidation, the courts generally appoint a Recovery officer who tends to act like a provisional liquidator. Such professionals can further request the IP to take the process of liquidation forward.
The Roles & Responsibility of an Insolvency Practitioner
Their role is limited to a few scenarios. Accordingly, an IP can undertake the following roles:
- Liquidator
- Administrator
- Nominee or Supervisor
- Trustee in Bankruptcy
The roles and responsibilities of an IP may vary depending upon the nature of the matter. As stated above, an IP may act as a liquidator in cases of liquidation. Also, they may act as an administrator, Nominees, or Supervisors in CVAs. Adding more to this, they also have various roles in company administration, which includes trading as well as the pre-pack administration.
An IP is known to provide the best guidance to the business owners of insolvent or the companies suffering from financial distress. For instance, https://antonybatty.com/company-liquidation/ providing liquidation services arrange the valuation of the assets to make sure that financial matters of the company are dealt with utmost care under the Insolvency Act 1986.
Insolvency Practitioners also assist you with the closure of solvent companies to make sure that the cash is liquidated from the same most cost-effectively . Again, this is all performed under the process- Members’ Voluntary Liquidation.
What Does an IP do?
As mentioned above, there are various roles of an insolvency practitioner, that can vary depending on the situation and the organization. Some other roles of an IP may include:
- Dealing with or potentially managing a running business (any type) directly.
- Understanding the problem and identifying the root cause of the same.
- Taking the required measures to preserve the jobs where possible.
- Dealing with complicated legalities and related claims.
- Negotiating between the debtors as well as the creditors to find the best repayment solutions to avoid insolvency.
Conclusion
Insolvency Practitioners are regulated professionals having multiple layers to provide you with the best guidance. Dealing with the financial matters of an insolvent company is the role they adhere to. So, when hiring one, you must ensure that you are dealing with licensed IP and not third party for your business-related affairs.
You amy also like: 6 Simple Ways to Avoid Business Bankruptcy
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