Understanding the role of an insolvency practitioner

20th November 2024

When operating a business, there may come a time when you require the expertise of an insolvency practitioner to guide you through the next steps.

While the role of a licensed insolvency practitioner is often associated with company liquidation, their services also expand into company rescue, making them a valuable line of support for businesses. 

The insolvency trade is highly regulated and supported by recognised professional bodies. Certain legal roles and activities are reserved for licensed insolvency practitioners that are voluntarily appointed by a company director, appointed by the court, or appointed by an official receiver in the event of compulsory liquidation. 

Seb Stokes, Business Development Manager at Begbies Traynor Group Sheffield , runs through the role of an insolvency practitioner, when intervention may be required and what to look for when appointing an insolvency practitioner. 

What is the role of an insolvency practitioner?

An insolvency practitioner is often referred to as an ‘IP’, liquidator or administrator. 
An insolvency practitioner’s role consists of acting as an office holder in insolvency proceedings: as a trustee in bankruptcy, a liquidator in company liquidation, an administrator in company administration and a supervisor of an individual voluntary arrangement and company voluntary arrangement.

The insolvency industry is overseen by the Insolvency Service and insolvency practitioners are authorised by recognised professional bodies under the provisions of the Insolvency Act 198, which includes:

• Institute of Chartered Accountants in England and Wales (ICAEW)
• Insolvency Practitioners Association (IPA)
• Institute of Chartered Accountants of Scotland (ICAS)
• Chartered Accountants Ireland (CAI)

An insolvency practitioner must meet education, practical training and experience requirements, which includes succeeding in the Joint Insolvency Examination to qualify as an insolvency practitioner. 

How much does an insolvency practitioner cost?

The fee charged by an insolvency practitioner varies based on the services required, the work that needs to be carried out and the complexity of the procedure. This is charged at a fixed rate or a time cost basis where the client pays for the total hours worked. In addition to this fee, disbursement costs may contribute to your total bill, which includes statutory notices and bonds.  

How to find an insolvency practitioner 

To find an insolvency practitioner near you, search for an insolvency practitioner through the Insolvency Service directory, or those hosted by a recognised professional body.

If you use an accountant or a financial adviser, they may recommend an insolvency practitioner that is part of their professional network. This is common practice as the services of an insolvency practitioner often go hand in hand with an accountant. This involves helping companies take stock of their financial position and navigate company closure and rescue. 

Carry out a Google search to find an insolvency practitioner near you. If your location is enabled, this will return a localised result with additional information, such as contact details and customer reviews. Word of mouth is also a powerful tool that can help find an insolvency practitioner that comes highly recommended. 

How to choose an insolvency practitioner 

When searching for an insolvency practitioner, use our checklist to make an informed decision.

• Is the insolvency practitioner licensed? Search for the individual through the official Insolvency Service directory 
• If you operate in a niche sector, is the insolvency practitioner well positioned to address your unique needs and pain points? An insolvency practitioner specialising in your field can maximise the value of your business as they are familiar with the inner workings of your business and the nature of company assets.  A specialist insolvency practitioner may also have industry connections that can benefit your business
• Is the insolvency practitioner reputable and vouched for through reviews, word of mouth or professional recommendations?
• Is the company a direct provider or a lead generation company directing enquiries to a third-party provider?

When choosing an insolvency practitioner, it’s important to engage with a trusted and reputable provider as the next steps will determine the future of your business. If you require an insolvency practitioner, get in touch with Seb Stokes  (Sebastian.Stokes@btguk.com) at Begbies Traynor Group in Sheffield to arrange a free, confidential consultation.