What is an Insolvency Practitioner (IP) and what do they do?
When placing a business into formal insolvency, there are many areas that need to be considered as part of the process. From liquidation to administration and the (sometimes confusing) acronyms that come with the process, it can be difficult to get your affairs in order and get the best result from a difficult situation.
With this in mind, we have spoken to Mike Gillard, a Licensed Insolvency Practitioner from Crewe based Business Recovery firm Mackenzie Goldberg Johnson MGJL.co.uk to provide a rundown of what an Insolvency Practitioner is and what they do when asked for advice.
What is an Insolvency Practitioner?
An Insolvency Practitioner is an individual who is qualified and licensed to act in relation to the insolvency processes as defined in the Insolvency Act 1986.
Only an individual maybe an Insolvency Practitioner, and they must be regulated by one of the various professional bodies which include the ICAEW, ACCA & IPA.
What does an Insolvency Practitioner do?
An Insolvency Practitioner is usually referred to businesses who are either having trading difficulties, believe that trading difficulties are around the corner or in the other extreme to businesses that have traded successfully with directors who are looking to retire and distribute the business assets in a tax efficient way to shareholders.
An Insolvency Practitioner aims to glean as much information from an initial meeting with businesses as possible. They will look to examine the trading history, think about what has worked for the business in the past, what has changed, and how things can change. They will look at the immediate pressing issues faced by the business and suggest the most appropriate solution to any problems encountered.
Any Insolvency Practitioner will explain that if there is a problem, or a possibility of a problem around the corner, the earlier professional advice is sought the better.
In the first instance any Insolvency Practitioner will look to use their experience to advise in a manner that can turn a business around and put that business on the road to recovery. If that isn’t appropriate or a turnaround plan is not working out then there are various options available for an Insolvency Practitioner to call upon, they may to look to save the business via Administration or Voluntary Arrangement, if there is no business to save then Liquidation maybe the only option.
Insolvency Practitioners generally have years of experience to deal with various difficult problems, they need to have strong communication skills to deal with a variety of stakeholders that can be affected by various situations.