Businesses that find themselves in tricky financial situations can often require the guidance of an insolvency practitioner. Aside from their practical utility, they’re also often a legal requirement for businesses facing insolvency or other related issues.
When looking for an insolvency practitioner, it’s important to be aware of the regulations surrounding their work. It’s a tightly regulated field, and it’s crucial that you get help from people with the appropriate certifications.
The Insolvency Service
Under The Insolvency Act 1986, insolvency practitioners are regulated by the Insolvency Service. Insolvency practitioners must be members of recognized professional bodies (or RPBs) in order to act in an authorized manner.
RPBs are able to make their own rules, however, they must ensure that they require their insolvency practitioners to operate with a high level of practical training and theoretical education. These stipulations are clearly outlined in a record called a Memorandum of Understandings which defines the arrangement between the Secretary of State and recognised professional bodies.
The Insolvency Practitioners Association
The Insolvency Practitioners Association (IPA) is one of the two RPBs in England and Wales. Their professional members must abide by strict professional standards and ethics, to ensure that they operate at an extremely high level. The IPA is responsible for investigating any complaints made against its members, and for ensuring that they continue to maintain their ability to operate to a high standard through ongoing training.
The Institute of Chartered Accountants in England and Wales
The Institute of Chartered Accountants in England and Wales (or ICAEW) is the largest professional body of accountants in England and Wales. It is also, along with the IPA, one of the two bodies that regulates insolvency practitioners. Like members of the IPA, its members are required to abide by a code of ethics and must commit to ongoing training and professional development.
Also read: Five Financial Tactics for Businesses
Joint Insolvency Examination
No matter which RPB an insolvency practitioner is a member of, they must pass the Joint Insolvency Examination. These exams are designed to ensure that all insolvency practitioners are able to operate at the same high level. The exams can be sat once a year in November, and consist of two different papers, one on Corporate Insolvency and the other on Personal Insolvency.
Insolvency practitioners who are members of an RPB and have passed the relevant exams can then operate with a degree of independence, through companies such as Chamberlain & Co. When engaging an insolvency practitioner, it’s important to ensure that they hold the relevant qualifications and certifications.
Consider this your due diligence, and an essential step in ensuring that no further harm comes to your business.
While the exact structures that regulate insolvency practitioners are relatively complicated, they are strictly regulated.
This is necessary to ensure that any businesses that have to go through insolvency are able to get capable, informed advice to help them through what will likely be a difficult period of time. It’s essential that you confirm the ability and certifications of any insolvency practitioners you engage so that you can get the help that you need.