Insolvency practitioner

Last updated

In the United Kingdom, only an authorised or licensed insolvency practitioner (IP) may be appointed in relation to formal insolvency procedures.

Contents

Quite often IPs have an accountancy background. A few active practitioners are lawyers, but it is not necessary to be qualified as either, as since 1986 there has been a direct entry route to the profession.

Insolvency is a regulated profession

In the UK, only a licensed insolvency practitioner can be appointed in relation to formal insolvency procedures for individuals and businesses. Insolvency practitioners are licensed to advise on, and undertake appointments in, all formal insolvency procedures. In the UK, insolvency practitioners are subject to oversight and inspection by their recognised professional body. Insolvency is a regulated profession under the Insolvency Act 1986 [1] and anyone who wishes to practise as an IP needs to pass the JIEB exams; a set of three examination papers set by the Joint Insolvency Examination Board (JIEB). The exams are held once a year, usually in November, and each last 3.5 hours. Once the exams have been passed, it is necessary to meet the authorising body's insolvency experience requirements. Licences are issued by the following recognised professional bodies: [2]

As a "competent authority" under the Insolvency Act 1986, the Secretary of State for Business, Enterprise and Regulatory Reform (BERR) – and, for Northern Ireland, the Department of Enterprise, Trade and Investment – also authorises IPs. The Insolvency Service, [3] an executive agency of BERR, oversees insolvency regulation in Great Britain and each authorising body is represented on the Joint Insolvency Committee, which aims to develop and maintain insolvency standards and best practice guidance, largely by means of Statements of Insolvency Practice (SIPs). [4]

There are currently around 1,735 licensed insolvency practitioners in the United Kingdom, [2] not all of whom take appointments – various lawyers hold licences but rarely use them to take appointments, preferring to advise other practitioners.[ citation needed ]

Trade body

The Association of Business Recovery Professionals, is the leading professional association for insolvency, business recovery and turnaround specialists in the UK. Known by its brand name ‘R3’, it promotes best practice for professionals working with financially troubled individuals and businesses.

Procedures requiring an insolvency practitioner

Under UK law, unless an official receiver already holds office, the following types of formal insolvency procedure must be dealt with by a licensed insolvency practitioner:

See also

Related Research Articles

<span class="mw-page-title-main">Accountant</span> Practitioner of accounting or accountancy

An accountant is a practitioner of accounting or accountancy. Accountants who have demonstrated competency through their professional associations' certification exams are certified to use titles such as Chartered Accountant, Chartered Certified Accountant or Certified Public Accountant, or Registered Public Accountant. Such professionals are granted certain responsibilities by statute, such as the ability to certify an organization's financial statements, and may be held liable for professional misconduct. Non-qualified accountants may be employed by a qualified accountant, or may work independently without statutory privileges and obligations.

The Institute of Chartered Accountants of Scotland (ICAS) is the world's first professional body of Chartered Accountants (CAs). It is a regulator, educator, influencer and thought leader.

<span class="mw-page-title-main">Institute of Chartered Accountants in England and Wales</span> UK professional organisation

The Institute of Chartered Accountants in England and Wales (ICAEW) is a professional membership organisation that promotes, develops and supports chartered accountants and students around the world. As of July 2022, it has over 198,000 members and students in 147 countries. ICAEW was established by royal charter in 1880.

<span class="mw-page-title-main">Insolvency</span> State of being unable to pay ones debts

In accounting, insolvency is the state of being unable to pay the debts, by a person or company (debtor), at maturity; those in a state of insolvency are said to be insolvent. There are two forms: cash-flow insolvency and balance-sheet insolvency.

<span class="mw-page-title-main">Association of Chartered Certified Accountants</span> Global professional organization

Founded in 1904, the Association of Chartered Certified Accountants(ACCA) is the global professional accounting body offering the Chartered Certified Accountant qualification (ACCA). It has 240,952 members and 541,930 future members worldwide. ACCA's headquarters are in London with principal administrative office in Glasgow. ACCA works through a network of over 110 offices and centres in 51 countries - with 346 Approved Learning Partners (ALP) and more than 7,600 Approved Employers worldwide, who provide employee development.

Bankruptcy in the United Kingdom is divided into separate local regimes for England and Wales, for Northern Ireland, and for Scotland. There is also a UK insolvency law which applies across the United Kingdom, since bankruptcy refers only to insolvency of individuals and partnerships. Other procedures, for example administration and liquidation, apply to insolvent companies. However, the term 'bankruptcy' is often used when referring to insolvent companies in the general media.

<span class="mw-page-title-main">Insolvency Service</span>

The Insolvency Service is an executive agency of the Department for Business, Energy and Industrial Strategy with headquarters in London. It has around 1,700 staff, operating from 22 locations across Great Britain.

An officer of the Insolvency Service of the United Kingdom, an official receiver (OR) is an officer of the court to which they are attached. The OR is answerable to the courts for carrying out the courts' orders and for fulfilling their duties under law. They also act on directions, instructions and guidance from the service's Inspector General or, less often, from the Secretary of State for Business, Energy and Industrial Strategy.

The Insolvency Practitioners Association (IPA) is a professional body whose purpose is to inform and regulate insolvency practitioners (IPs) within the UK and Ireland. There is a similar organisation in Australia.

<span class="mw-page-title-main">Insolvency Act 1986</span> United Kingdom legislation

The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.

Wrongful trading is a type of civil wrong found in UK insolvency law, under Section 214 Insolvency Act 1986. It was introduced to enable contributions to be obtained for the benefit of creditors from those responsible for mismanagement of the insolvent company. Under Australian insolvency law the equivalent concept is called "insolvent trading".

British qualified accountants are full voting members of United Kingdom professional bodies that evaluate individual experience and test competencies for accountants.

As a legal concept, administration is a procedure under the insolvency laws of a number of common law jurisdictions, similar to bankruptcy in the United States. It functions as a rescue mechanism for insolvent entities and allows them to carry on running their business. The process – in the United Kingdom colloquially called being "under administration" – is an alternative to liquidation or may be a precursor to it. Administration is commenced by an administration order.

The Association of International Accountants (AIA) is a professional accountancy body. It was founded in the UK in 1928 and since that date has promoted the concept of ‘international accounting’ to create a global network of accountants in over 85 countries worldwide.

<span class="mw-page-title-main">United Kingdom insolvency law</span> Law in the United Kingdom of Great Britain and Northern Ireland

United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While UK bankruptcy law concerns the rules for natural persons, the term insolvency is generally used for companies formed under the Companies Act 2006. "Insolvency" means being unable to pay debts. Since the Cork Report of 1982, the modern policy of UK insolvency law has been to attempt to rescue a company that is in difficulty, to minimise losses and fairly distribute the burdens between the community, employees, creditors and other stakeholders that result from enterprise failure. If a company cannot be saved it is "liquidated", so that the assets are sold off to repay creditors according to their priority. The main sources of law include the Insolvency Act 1986, the Insolvency Rules 1986, the Company Directors Disqualification Act 1986, the Employment Rights Act 1996 Part XII, the Insolvency Regulation (EC) 1346/2000 and case law. Numerous other Acts, statutory instruments and cases relating to labour, banking, property and conflicts of laws also shape the subject.

Secretary of State for Trade and Industry v Slater [2007] IRLR 928 is a UK labour law case, concerning the effects of a business transfer on an employee's rights at work. If the company goes into voluntary liquidation, and the business is sold before the final disposal of assets, then TUPER 2006 regulation 8 does not apply.

According to the Office for National Statistics, sole proprietors represented 23.8% of all UK enterprise in 2010. Of that number, more than half a million sole traders were operating via the PAYE or VAT system alone. Sole traders are a distinct legal entity, operating as one type of UK business structure. In the event of financial problems affecting the business, they are subject to different rules to those that govern companies.

<span class="mw-page-title-main">British Virgin Islands company law</span>

The British Virgin Islands company law is the law that governs businesses registered in the British Virgin Islands. It is primarily codified through the BVI Business Companies Act, 2004, and to a lesser extent by the Insolvency Act, 2003 and by the Securities and Investment Business Act, 2010. The British Virgin Islands has approximately 30 registered companies per head of population, which is likely the highest ratio of any country in the world. Annual company registration fees provide a significant part of Government revenue in the British Virgin Islands, which accounts for the comparative lack of other taxation. This might explain why company law forms a much more prominent part of the law of the British Virgin Islands when compared to countries of similar size.

<span class="mw-page-title-main">Cayman Islands bankruptcy law</span>

Cayman Islands bankruptcy law is principally codified in five statutes and statutory instruments:

<span class="mw-page-title-main">Corporate Insolvency and Governance Act 2020</span> UK law

The Corporate Insolvency and Governance Act 2020 is an act of the Parliament of the United Kingdom relating to companies and other entities in financial difficulty, and which makes temporary changes to laws relating to the governance and regulation of companies and other entities.

References

  1. "Insolvency Act 1986 1986 CHAPTER 45" (PDF). Thomson Reuters (Le g al) Limited. Archived from the original (PDF) on 9 July 2011. Retrieved 22 April 2014.
  2. 1 2 "The future of regulation insolvency practitioner" (PDF). Association of Business Recovery Professionals. Retrieved 22 April 2014.
  3. http://www.insolvency.gov.uk Archived 2009-04-29 at the Wayback Machine
  4. Joint Insolvency Committee Annual Report 2006 Archived September 10, 2008, at the Wayback Machine