What is a licenced Insolvency Practitioner?
A licenced insolvency practitioner is a qualified professional individual holding the necessary licences and other relevant qualifications in order to act as the office holder in various Insolvency processes. This can relate to either personal or corporate insolvency. In the personal insolvency process, the licenced insolvency practitioner will act potentially as the trustee of a bankruptcy estate or the nominee/supervisor of an individual voluntary arrangement (IVA).
In a bankruptcy estate, the insolvency practitioner’s role as trustee is to initially find and protect any assets and then establish who the creditors are and, subject to costs, distribute the assets to the agreed creditors of the estate.
In an IVA, the insolvency practitioner takes a more supervisory role to ensure that the individual deals with their assets and income forming part of the proposal and introduces the monies for the payment of their creditors in the way they have proposed they will do over a given period.
In theory, if the individual subject to the IVA complies with the terms of the arrangement, then the formal role of the supervisor will be at a low level. However, this can change from case to case, particularly if the debtor does not fully comply with the proposal.
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In a corporate insolvency process, the licenced insolvency practitioner will either act as a Liquidator in liquidation, Administrator of an Administration or as the Supervisor of a Company Voluntary Arrangement.
Liquidation and Administration
In the role as Liquidator or Administrator, the principle duty will be to the creditors and to realise the assets of the company to the best advantage in order to pay, where possible, dividends to the creditors. It may also be to carry out investigations into the conduct of the company’s activities leading up to the insolvency.
As Administrator, the insolvency practitioner may have the opportunity to explore and achieve the sale of the business as a going concern and will follow due process in order to ensure that the business is exposed correctly to the market place and the best result is achieved.
Corporate Voluntary Arrangement
In a CVA, the role of the insolvency practitioner is more supervisory ensuring that the company directors do contribute future income and realise assets for the benefit of creditors as they set out in their proposal.
If you need help – business rescue or insolvency support, you must seek the help of a professional who can guide and direct you to remain within the law whilst progressing with the appropriate process.
Blunt speaking on insolvency matters – Yorkshire Powerhouse
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