subject: Deciding When To Use An Insolvency Practitioner [print this page] When companies are experiencing financial difficulties, they may require the use of an insolvency practitioner in order to gain advice on which route to take towards solving them. Insolvency practitioners can provide a wide range of services for companies wishing to solve their debt problems and for companies that are considering bringing the business to an end.
If your company finds that it is struggling financially and you feel that it cannot continue trading, then you may consider entering a Creditors Voluntary Liquidation (CVL). For this process, the use of an insolvency practitioner is compulsory. An insolvency practitioner will be appointed as a liquidator and will help the company to pay off its debts in order to wind up the company.
If you feel that the company must be brought to an end because of reasons other than insolvency, then the company may go through a Member Voluntary Liquidation (MVL). A liquidator is also needed for this process and is again responsible for the winding up of the company.
If you are considering liquidation but need advice on alternative routes, then you may wish to consider using an insolvency practitioner. Insolvency practitioners not only play a big part in some of the alternative processes available, they will also act as a provisional liquidator for companies that have not quite entered the liquidation process.
Without an insolvency practitioner, companies cannot complete processes such as liquidation or Administration. It is important that the appointed insolvency practitioner is qualified, otherwise the liquidation process will not be able to be completed properly. If an individual or company feels that an insolvency practitioner is not properly qualified then they may wish to consider appointing a different insolvency practitioner, or filing a complaint if the process has caused further problems. During a Creditors Voluntary Liquidation, creditors may disapprove of the appointed liquidator, which may lead to an alternative liquidator taking the company through the process.
