Insolvency Practitioner
If your company is facing financial difficulties, or you’re ready to close a solvent business, you’ll need to appoint a licensed insolvency practitioner (IP) to manage the liquidation process. The IP will assess your options and guide you through the most appropriate solution.
What is an insolvency practitioner?
An authorised insolvency practitioner is a licensed professional who acts on behalf of companies or individuals going through a formal insolvency process.
Insolvency practitioner meaning
An insolvency practitioner is a regulated professional licensed to manage formal insolvency procedures. They’re licensed by an approved regulatory body to take on formal appointments, such as acting as a liquidator, administrator, or supervisor of a voluntary arrangement.
They act in the interests of creditors, oversee the realisation of assets, and ensure the process is carried out in line with insolvency law.
Are insolvency practitioners regulated in the UK?
All insolvency practitioners in the UK must be licensed and are regulated by professional bodies, including the Insolvency Practitioners Association (IPA), the Institute of Chartered Accountants in England and Wales (ICAEW), and the Institute of Chartered Accountants of Scotland (ICAS).
If you’re unsure whether someone is a qualified insolvency practitioner, you can verify their licence through the Insolvency Service’s register of licensed insolvency practitioners.
What does an insolvency practitioner do?
An insolvency practitioner is licensed to act on behalf of a company by taking control of its affairs, dealing with its assets and liabilities, and ensuring creditors are treated fairly and in the correct order of priority. They can also advise directors on how to meet their legal obligations in the lead-up to a formal insolvency process, and how to avoid the risks of wrongful trading and other potential offences.
Insolvency practitioner services
Licensed insolvency practitioners are appointed across a range of formal procedures, including:
- Creditors’ Voluntary Liquidation (CVL) – closing an insolvent company and distributing assets to creditors.
- Members’ Voluntary Liquidation (MVL) – closing a solvent company tax-efficiently and distributing funds to shareholders.
- Administration – attempting to rescue or restructure a business to achieve a better outcome for creditors than immediate liquidation.
- Company Voluntary Arrangement (CVA) – negotiating a repayment plan with creditors to allow the business to continue trading.
- Receivership – appointed by a secured creditor to recover money owed to them.
Many insolvency practitioners specialise in particular areas, but at the Liquidation Centre, our focus is company liquidation, both CVL and MVL. We can assist with other services, such as administration and restructuring, through our parent company, Exigen Group.
Insolvency practitioner vs liquidator: what’s the difference?
This is a common point of confusion. An insolvency practitioner is a regulated professional. A liquidator is the specific role they perform when appointed to manage liquidation.
In other words, all liquidators are insolvency practitioners, but not all insolvency practitioners are acting as liquidators. The same IP might act as an administrator in one case and a liquidator in another. The title changes depending on the procedure; the licence requirement doesn’t.
When do you need an insolvency practitioner?
If your company is under financial pressure, or you’re ready to close and want to do it properly, an insolvency practitioner can help you understand your options before the situation gets harder to manage.
You should contact an insolvency practitioner if:
- You’re struggling to pay suppliers, staff, or HMRC on time.
- Creditors are threatening legal action, or you’ve been issued a winding-up petition.
- Your company has significant debts that you cannot afford to repay.
- You want to close a solvent company in a tax-efficient way.
- You’re unsure whether your company is technically insolvent.
You can’t carry out a CVL, MVL, or administration without a licensed insolvency practitioner, as it’s a legal requirement. Getting advice if your business is struggling financially should be done earlier than most directors expect.
Who appoints an insolvency practitioner?
There are different ways that an IP is appointed, and it depends on the process:
- In a CVL, directors propose the IP, and shareholders vote to approve the appointment.
- In an MVL, directors nominate the IP, and shareholders pass a resolution to wind up the company.
- In a compulsory liquidation, the court appoints an Official Receiver, who may be replaced by a licensed IP if creditors so choose.
- In administration, the IP can be appointed by the company, its directors, or a qualifying floating charge holder.
How do I choose an insolvency practitioner?
Before you appoint an IP, you should research the insolvency practice they work for and check if they hold a current licence from a recognised regulatory body, which you can verify on the Insolvency Service register. Some insolvency practitioners focus on personal insolvency, so if you’re closing a company, you’ll want someone who has the experience of regularly handling corporate insolvencies.
Understanding their fees and how transparent they are about costs is just as important. A reputable insolvency practitioner will give you a clear breakdown of costs before you commit to anything. So, if you can’t get a straight answer on the price, that could be a sign to look elsewhere.
Clear communication during the liquidation process is so important. Make sure you’re happy with how the IP explains your options, as you’ll be dealing with this person throughout what can be a stressful process. You want someone who explains things clearly, keeps you informed, and doesn’t leave you chasing updates.
Talk to an insolvency practitioner at the Liquidation Centre
If any of this sounds familiar, it’s worth having a conversation sooner rather than later. Our licensed insolvency practitioners can talk you through your options, explain what each route would mean for you and your company, and give you a clear idea of costs, all with no obligation.
Contact us for a free, confidential consultation and we’ll help you work out the right next step.
How to find an insolvency practitioner
There are several ways you can find an insolvency practitioner, including:
- The Insolvency Service register – the government’s official tool for checking whether an IP is currently licensed.
- The IPA directory – the Insolvency Practitioners Association maintains a directory of its members, so if you know the IP by name, you can check they’re licensed here.
- ICAEW – also lists licensed members who practise and specialise in restructuring or insolvency
- Direct search – searching for an insolvency practitioner firm that specialises in the type of procedure you need. You may want to choose a firm that is close by, though most companies have secure, online solutions to speed up the process.
There are lots of insolvency firms that will offer a free initial consultation before you make any decisions or commitments. When you have that first conversation, you should feel like you’ve got a clear picture of your options, the likely process, and the cost.
The Liquidation Centre offers free, confidential consultations with no obligation. If you’d like to speak to one of our licensed insolvency practitioners, contact us here.
Insolvency practitioner fees and costs
Insolvency practitioner fees are among the first things directors want to understand, but the cost varies depending on the type of company closure process, the complexity of the case, and the IP firm appointed.
How much does an insolvency practitioner cost?
For liquidations, a CVL typically starts from around £3,000 plus VAT, an MVL from £1,499, and administration tends to cost more given the volume of work involved.
Any reputable insolvency practitioner will give you a clear fee structure upfront, before you commit to anything. If you can’t get a straight answer on costs, that’s a sign to look elsewhere.
Who pays the fees for an insolvency practitioner?
In most cases, the fees for an insolvency practitioner are paid from the company’s assets. The liquidator realises those assets and their fees are paid from the proceeds before any distribution is made to creditors.
In an MVL, fees are deducted from the funds being distributed to shareholders.
If a company has no assets, directors sometimes contribute to the liquidation costs themselves. This should be discussed up front so there are no surprises about how the costs will be covered.
What if I can’t afford an insolvency practitioner?
Cost is one of the first things directors worry about, especially when the company is already struggling. The reassuring thing is that in a CVL, the insolvency practitioner’s fees are typically covered by the company’s assets, so in many cases, directors don’t need to fund the process themselves.
If there are no assets, other options may be available, including payment arrangements where circumstances allow.
The worst thing you can do is delay getting advice because of cost concerns. The longer an insolvent company continues trading, the greater the risk to directors personally.
How the Liquidation Centre can help as your insolvency practitioner
The Liquidation Centre is one of the UK’s leading insolvency practices and providers of company liquidation services. Our licensed insolvency practitioners handle CVLs and MVLs for directors across the UK every day.
We’ll give you clear advice on your options, a straight answer on costs, and a process that’s as straightforward as we can make it.
If you’re not sure which option is right for your business, call us for a free, confidential consultation.
Insolvency practitioner FAQs
What is the difference between an insolvency practitioner and a liquidator? ▸
When comparing an insolvency practitioner vs a liquidator, the difference is that an insolvency practitioner is a licensed professional, and a liquidator is the role they take on when appointed to manage a liquidation.
How much does an insolvency practitioner charge? ▸
The costs of an insolvency practitioner vary depending on the type of liquidation and the complexity of the case. At the Liquidation Centre, a CVL can start from around £3,000 plus VAT, and an MVL from £1,499. A reputable IP will give you a clear breakdown before you commit to anything.
How do I find a licensed insolvency practitioner? ▸
You can search the Insolvency Service’s register to verify that an IP holds a current licence. The IPA and ICAEW also maintain directories of their licensed members. If you’d like to speak to one of our insolvency practitioners at Liquidation Centre, contact us for a free initial consultation.
How do I choose an insolvency practitioner? ▸
The first thing you should do before choosing an insolvency practitioner is check that they’re licensed and ask for a clear breakdown of fees upfront. You also want to be confident in their communication, as having an IP who can clearly and simply explain the process and keep you informed throughout is important. That’s why we offer a free initial consultation, as it’s a good way to get a feel for whether you’re comfortable working with the team.
How do I complain about an insolvency practitioner? ▸
If you have a concern about an insolvency practitioner’s conduct, you can raise it with their regulatory body. That might be the IPA, ICAEW, or ICAS, depending on who licensed them. The Insolvency Service also handles complaints in certain circumstances. If you’re unsure where to file a complaint, the Insolvency Service website has information on the process.