What is the role of a licensed insolvency practitioner during a formal insolvency process?

Updated: 11th February 2021

An Insolvency Practitioner’s initial aim will be to rescue a company from liquidation and subsequent closure. If this proves impossible, their role will be to realise the highest return for creditors by selling company assets.

An IP will scrutinise the workings and performance of the company in an attempt to turn the business around, or rescue it through restructuring. A sale of assets may take place, providing a cash injection and potential streamlining of business operations. Additionally, the their role is to negotiate with creditors to obtain extended payment terms for the company.

One of the challenges they face is balancing the needs of the company and its creditors. The existence of competing interests is clear, but the IP’s obligation in all cases is to keep creditor interests to the fore, and maximise their returns.

Begbies Traynor has vast experience of business rescue and can offer a same-day consultation from offices around the UK.

What options does an IP have when appointed?

A range of options usually present themselves on appointment, but in general terms an IP will use their sound commercial judgement to decide on the best course of action.

This may include:

  • Taking over control of the company for a period in order to turn its fortunes around.
  • Negotiating with creditors for extended payment terms that allow the company to continue trading, so providing an opportunity to improve the situation of both company and creditors.
  • Selling the underlying business as a going concern to a third party, or as is common, to the existing directors.
  • Closing down the company and liquidating its assets.

Closure is a last resort, and if the business is deemed to be fundamentally viable, the focus will be on rescuing the company and saving jobs without compromising the creditors’ position.

What are the main duties of a licensed Insolvency Practitioner?

During company insolvency procedures, an IP will look at all the options available to the directors and provide professional advice on the best course of action. As described above, this could range from rescue to closure of the company, depending on each situation.

Negotiating with HMRC and other creditors is a valuable part of an IP’s duties. Their influence and presence as a professional intermediary in proceedings tends to instil greater confidence in creditors, and can gain their trust.

A licensed Insolvency Practitioner will sell company assets to realise money for creditors, subsequently collecting in and distributing funds to creditor groups in accordance with legislation. An IP is also responsible for the inspection and agreement of creditor claims, once funds are known to be available, and for sending a report to the Secretary of State on the conduct of directors during the time leading up to insolvency.

Voluntary liquidations

In the case of voluntary liquidation, an IP will assist the directors to meet legal obligations, including the arrangement of creditor and shareholder meetings, and the supervision of the liquidation process.

In all roles, the Insolvency Practitioner is required to abide by a code of conduct produced by the Insolvency Service, providing professional and ethical guidance.

Begbies Traynor is the largest business recovery practice in the UK, and is available for appointment. We have an extensive UK office network, and offer a free initial consultation.

Network of Over 100 UK Offices

Find your local Begbies Traynor Group office and speak to an adviser today.

Find your Local Office
0800 063 9221

Call our Confidential Advice Line. Calls to this number are free of charge.

Call us now...
Request a Meeting

We invite you to come and discuss your enquiry with us at your convenience.

Request a meeting...
0800 464 0871

Call our Confidential Advice Line. Calls to this number are free of charge.

Call us now...
Request a Meeting

We invite you to come and discuss your enquiry with us at your convenience.

Request a meeting...
0161 837 1700

Call our Confidential Advice Line. Calls to this number are free of charge.

Call us now...
Request a Meeting

We invite you to come and discuss your enquiry with us at your convenience.

Request a meeting...
Begbies Traynor Group plc, announces that it has completed the acquisition of CVR Global LLP
CVR is a leading independent firm of insolvency practitioners, forensic accountants and experts in other related complementary disciplines.
Read More →
Coronavirus pushes financially distressed companies over the half-million mark
Number of businesses in significant distress stands at 509,000 – the highest number measured by the Red Flag Alert research
Read More →
BTG Advisory accelerates growth with appointment of four new partners to its London office
BTG Advisory, the boutique advisory arm of Begbies Traynor Group announces the appointment of four new partners to its Canary Wharf office
Read More →
Eighty jobs saved with £1m sale of engineering business
South Yorkshire company Newburgh Precision rescued through administration
Sale enables 75-year-old business to continue trading
Read More →
Join thousands of professionals by signing up for our updates
Analysis and Opinion from our Partners
Top Industry News
Register Now →

Advice you can trust

We are accredited by the following industry leading organisations

Insolvency Practitioners Association Institute of Chartered Accountants in England and Wales R3: Association of Business Recovery Professionals ICAEW Business Advice Service Turnaround Management Association ICAS | The Institute of Chartered Accountants of Scotland

Contact the Begbies Traynor Group team

or Find your Nearest Office

Here at Begbies Traynor Group we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY


This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our PRIVACY POLICY