Finding the right insolvency practitioner to work with when your business is in financial trouble is crucial. An IP will ideally be able to provide you with expert insolvency advice geared towards your specific case, and they should also have extensive experience working with companies from your sector or industry.
You should always check an IP’s qualifications https://insolvencypractitioner.org.uk and awarding body number before appointing them, which you can do by searching the Insolvency Service directory. This will help you to validate their credentials and ensure they are licensed to work as an insolvency practitioner. It’s also advisable to find an insolvency practitioner who operates locally, as this will make it easier to meet in person and discuss matters face-to-face.
Insolvency practitioners are regulated by the Insolvency Service and must follow rules and guidance set out by their professional bodies. In addition, they must adhere to the IVA protocol, a voluntary code of practice that sets out clear processes for how an individual voluntary arrangement (IVA) is set up and managed.
A good IP will have a deep understanding of all the formal insolvency procedures including liquidations, company administrations, and receiverships. They will also be familiar with a wide range of methods for valuing businesses, such as asset valuation, relative valuation, cash flow and future maintainable earnings valuation. In addition, they should be able to clearly communicate with directors in an easy-to-understand way and avoid the use of jargon.
It’s often the case that directors will be recommended an IP by their accountant or solicitor, however, it’s vital that you do your own research. You can do this by searching online or asking fellow directors for recommendations. You should also ask any potential IP about their experiences and track record. This will give you an idea of their level of expertise and whether they are a good fit for your needs.
Another thing to consider is the size of an IP’s firm. Larger firms may have a greater breadth of resources, which can be helpful when advising on complex matters or working on larger cases. But this is not necessarily a prerequisite for quality advice, as smaller firms can offer just as much expertise and support when it comes to insolvency issues.
Many unscrupulous firms advertise as ‘insolvency experts’ or ‘insolvency advisers’ without being licensed to work as an insolvency practitioner. This can leave you vulnerable to shoddy, unprofessional advice that could ultimately put you at risk of misconduct allegations or even personal liability if your company is liquidated as a result of following the wrong advice.
As such, it’s always best to work with an ICAEW-licensed IP to avoid these risks. Luckily, it’s never been easier to do this than it is now, with a quick internet search bringing up plenty of results of IPs near you. However, it’s essential to take the time to carry out thorough research to find an IP who is well-qualified and reputable. This will ensure that you get the best possible advice for your particular circumstances and will have a strong chance of getting the best possible outcome for your situation.