Insolvency Practitioners Explained

May 5th, 2014 | By | Category: Debt

When companies are experiencing financial difficulties, they may call upon the use of an insolvency practitioner in order to obtain advice on which route to take towards solving them. Insolvency practitioners can provide a broad range of services for companies wishing to settle their debt problems and for companies that are considering bringing the business to an end.

If your company believes that it is struggling financially and you believe that it cannot continue trading, then you may consider entering a Creditors Voluntary Liquidation (CVL). The use of an insolvency practitioner is mandatory, for this process. An insolvency practitioner will be designated as a liquidator and will allow the company to pay off its debts in order to close the company.

If you think that the company has to stop because of grounds other than insolvency, then the company may go through a Member Voluntary Liquidation (MVL). A liquidator is also required for this process and is again liable for the winding up of the company.

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When appointed as a liquidator, insolvency practitioners have many responsibilities. Liquidators will take supervision of the company s assets and will seek to ensure that creditors are paid off, for Members Voluntary Liquidations (MVL) and Creditors Voluntary Liquidations (CVL). Liquidators have more responsibilities during a Creditors Voluntary Liquidation, as they’ll be dealing with insolvent companies and will need to perform a thorough inquiry into the company s affairs.

Liquidators will have certain guidelines to follow during the liquidation process. If a liquidator fails to defend a company s confidentiality then it may cause a complaint being filed against the liquidator. It is imperative that the liquidator is experienced and professional, otherwise a company could take action. An alternative liquidator may be appointed if creditors disapprove of the current liquidator. Experienced liquidators will help company directors to feel at ease when dealing with complaints from creditors.

Insolvency practitioners also play a large part in procedures such as Administration or formal and informal arrangements between the company directors and the creditors. These are alternative routes to liquidation. With the assistance of an insolvency practitioner, companies may be able to achieve a comfortable arrangement with those that are owed money, allowing the firm to keep up to date with payments whilst being given time to get the business running again.

If you’re considering liquidation but need advice on alternative routes, then you may want to consider using an insolvency practitioner. Insolvency practitioners not only play a large part in a number of the alternative processes available, they’ll also serve as a provisional liquidator for companies that haven’t quite entered the liquidation process.

Companies cannot complete processes such as liquidation or Administration without an insolvency practitioner. It is important that the appointed insolvency practitioner is qualified, otherwise the liquidation process won’t be in a position to be completed properly. If an individual or company feels that an insolvency practitioner isn’t properly qualified then they may want to consider appointing a different insolvency practitioner, or lodge a complaint if the procedure has caused further problems. During a Creditors Voluntary Liquidation, creditors may disapprove of the appointed liquidator. This may lead to an alternative liquidator taking the company through the process.

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