A business that’s in financial trouble may be unable to pay its bills or its employees. These situations can lead to insolvency. When a business reaches this point, calling an Insolvency Practitioner (IP) is usually the next step. These professionals are licensed and have the authority to handle insolvency matters.
What Are The Requirements For Insolvency Practitioners?
Any individual wishing to act as an insolvency practitioner must have not only passed the insolvency examinations, but also gained experience doing insolvency work. In addition, they must be licensed and regulated by a recognised professional body.
The Objective Of An IP
An insolvency practitioner’s objective is to sort the affairs of a business that is in financial trouble or that has reached the point of insolvency. Depending on a business’s situation, an IP may take steps to rescue a company, or where this is not possible, complete several other tasks including, maximising asset realisations for the benefit of creditors.
Insolvency practitioners are the go-between for companies and creditors - ensuring a business is as protected as possible whilst acting in the best interests of the company creditors as a whole.
How IPs Help Failing Businesses
Insolvency practitioners can offer failing business help well before a company ever reaches the point of insolvency. Calling an IP when you begin having problems paying creditors can be of great benefit. An IP can take an objective look at your business and identify current and potential problems, as well as advise you on the next steps you can take.
If a business goes into administration, an IP manages the company with a view of potentially rescuing the company as a going concern.
In the case of liquidation, the role of an insolvency practitioner is to realise all business assets, including vehicles, equipment and buildings. The money from these sales is then distributed by the IP to the company’s creditors (subject to the costs and expenses of the liquidation).
Insolvency practitioners possess many skills that a struggling business owner may not. For example, they understand the legal language used, and have plenty of experience with identifying possible issues which may have placed a business on the path it is currently on.
Negotiation is another area where a licensed insolvency practitioner can help. Where a company owner may not be able to stop creditors from calling, an IP may be able to mitigate creditor pressure.
Any process involving getting a business out of debt can be difficult and incredibly stressful for a business owner. This makes it absolutely essential to choose the right IP for your situation. The right IP will be one who replies quickly to your initial inquiry and suggests making an appointment as soon as possible. At BCR, our qualified and sympathetic IPs are well aware of the time-sensitive nature of your situation and want to help you get it rectified as soon as possible.
When choosing your IP, it’s important to ensure you can trust them, and that they are honest with you about what they can do for your business as well as what they will charge for their service. For a successful solution to your company’s financial difficulties, please get in touch today for an informal chat about your situation.