Insolvency practitioner

Overview

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

Insolvency Practitioners Association Institute of Chartered Accountants in England & Wales Institute of Chartered Accountants of Scotland As a "competent authority" under the Insolvency Act 1986, the Secretary of State for Business and Trade (DBT) – and, for Northern Ireland, the Department of Enterprise, Trade and Investment – also authorises IPs. The Insolvency Service, an executive agency of DBT, 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). There are currently around 1,500 licensed insolvency practitioners in the United Kingdom, not all of whom take appointments – various lawyers hold licences but rarely use them to take appointments, preferring to advise other practitioners.

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 practices 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:

Administrations Administrative receiverships Bankruptcy Company voluntary arrangements Compulsory liquidations Creditors' voluntary liquidations Deeds of arrangement Individual voluntary arrangements Lump-sum IVAs Section 110 reconstruction Members' voluntary liquidations Protected trust deeds (only available in Scotland)

See also

Insolvency Act 1986 Insolvency Service

External links

Trade body for Insolvency Practitioners Insolvency Service website Insolvency Practitioners Association website Online Study Support & Discussion Forum for the JIEB exams Insolvency News Licensed Insolvency Practitioner Finder