subject: Insolvency Practitioners In Liquidation [print this page] A company cannot go through the liquidation process without the services of an insolvency practitioner. When a company liquidates voluntarily, an insolvency practitioner will be appointed as liquidator and will be responsible for the winding up of the company. Only qualified insolvency practitioners can act as a liquidator. Companies can also use provisional liquidators when the liquidation process has not quite begun. For compulsory liquidations, which involves the company being given a winding up order, an insolvency practitioner will be appointed by a court rather than by the company.
When appointed as a liquidator, insolvency practitioners have many responsibilities. For Members Voluntary Liquidations (MVL) and Creditors Voluntary Liquidations (CVL), liquidators will take control of the companys assets and will ensure that creditors are paid off. Liquidators have more responsibilities during a Creditors Voluntary Liquidation, as they will be dealing with insolvent companies and will need to carry out a thorough investigation into the companys affairs.
Liquidators will have certain guidelines to follow during the liquidation process. If a liquidator fails to protect a companys confidentiality then it may result in a complaint being filed against the liquidator. It is essential that the liquidator is experienced and professional, otherwise a company could take action. An alternative liquidator may be appointed if creditors disapprove of the current liquidator. Experienced liquidators will help company directors to feel at ease when dealing with complaints from creditors.
Insolvency practitioners also play a big part in procedures such as Administration or formal and informal arrangements between the company directors and the creditors, which are alternative routes to liquidation. With the help of an insolvency practitioner, companies may be able to reach a comfortable arrangement with those that are owed money, allowing the company to keep up to date with payments whilst being given time to get the business running again.
