Insolvency practitioner
Encyclopedia
In the United Kingdom
, only an authorised or licensed Insolvency Practitioner (usually abbreviated to IP) may be appointed in relation to formal insolvency
procedures.
Quite often IPs have an accountancy
background. A few active practitioners are lawyer
s, 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 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:
As a "competent authority" under the Insolvency Act 1986
, the Secretary of State for Business, Enterprise and Regulatory Reform (BERR) - and, for Northern Ireland, the Department of Enterprise, Trade and Investment - also authorises IPs. The Insolvency Service
, an executive agency of BERR, 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 2,500 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.
’, it promotes best practice for professionals working with financially troubled individuals and businesses.
already holds office, the following types of formal insolvency procedure must be dealt with by a Licensed Insolvency Practitioner:
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, only an authorised or licensed Insolvency Practitioner (usually abbreviated to IP) may be appointed in relation to formal insolvency
Insolvency
Insolvency means the inability to pay one's debts as they fall due. Usually used to refer to a business, insolvency refers to the inability of a company to pay off its debts.Business insolvency is defined in two different ways:...
procedures.
Quite often IPs have an accountancy
Accountant
An accountant is a practitioner of accountancy or accounting , which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.The Big Four auditors are the largest...
background. A few active practitioners are lawyer
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
s, 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 (referred to as IP) 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
Insolvency Act 1986
The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.-History:...
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 AssociationInsolvency Practitioners AssociationThe Insolvency Practitioners Association is a professional body whose purpose is to inform and regulate insolvency practitioners within the UK and Ireland. There is a similar organization in Australia.-History:...
- Institute of Chartered Accountants in England & WalesInstitute of Chartered Accountants in England & WalesThe Institute of Chartered Accountants in England and Wales was established by a Royal Charter in 1880. It has over 130,000 members. Over 15,000 of these members live and work outside the UK...
- Institute of Chartered Accountants in IrelandInstitute of Chartered Accountants in IrelandMembers of the Institute use the designatory letters ACA. Senior members may be elected Fellows and use the designatory letters FCA....
- Institute of Chartered Accountants of ScotlandInstitute of Chartered Accountants of ScotlandThe Institute of Chartered Accountants of Scotland is the Scottish professional body of Chartered Accountants . It is a regulator, educator and influencer.ICAS act as a thought leader and voice of the professional business community...
- The Law Society
- Law Society of Northern IrelandLaw Society of Northern Ireland'The is a professional body established by Royal Charter granted on 10 July 1922 and whose powers and duties are to regulate the solicitors' profession in Northern Ireland with the aim of protecting the public....
- Law Society of ScotlandLaw Society of ScotlandThe Law Society of Scotland is the professional governing body for Scottish solicitors.It promotes excellence among solicitors through representation, support and regulation of its members. It also promotes the interests of the public in relation to the profession...
- Association of Chartered Certified AccountantsAssociation of Chartered Certified AccountantsFounded in 1904, the Association of Chartered Certified Accountants is the global body for professional accountants offering the Chartered Certified Accountant qualification . it is one of the largest and fastest-growing global accountancy bodies with 147,000 members and 424,000 students in 170...
As a "competent authority" under the Insolvency Act 1986
Insolvency Act 1986
The Insolvency Act 1986 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.-History:...
, the Secretary of State for Business, Enterprise and Regulatory Reform (BERR) - and, for Northern Ireland, the Department of Enterprise, Trade and Investment - also authorises IPs. The Insolvency Service
Insolvency Service
The Insolvency Service is an executive agency of the United Kingdom's Department for Business, Innovation and Skills which:* administers and investigates the affairs of bankrupts, of companies and partnerships wound up by the court, and establishes why they became insolvent;* acts as...
, an executive agency of BERR, 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 2,500 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 ‘R3R3
R3, R.III or R-3 or R/3 may refer to:* R3 , a computer game for the Amiga series of computers in 1995* R3 , the Information System Development and Support unit within Information Society Directorate-General of the European Commission* R3: Extreme risk of explosion by shock, friction, fire or other...
’, it promotes best practice for professionals working with financially troubled individuals and businesses.
Procedures requiring an Insolvency Practitioner
Under UK law, unless the Official ReceiverOfficial Receiver
An officer of the Insolvency Service of the United Kingdom, the Official Receiver is an officer of the court to which he is attached. The OR is therefore answerable to the courts for carrying out the courts' orders and for fulfilling his duties under law...
already holds office, the following types of formal insolvency procedure must be dealt with by a Licensed Insolvency Practitioner:
- BankruptcyBankruptcyBankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
- Creditors' Voluntary Liquidations
- Compulsory Liquidations
- Members' Voluntary Liquidations
- Individual Voluntary ArrangementIndividual Voluntary ArrangementIn the UK, an Individual Voluntary Arrangement is a formal alternative for individuals wishing to avoid bankruptcy.The IVA was established by and is governed by Part VIII of the Insolvency Act 1986 and constitutes a formal repayment proposal presented to a debtor's creditors via an Insolvency...
s - Company Voluntary Arrangements
- Administrations
- Administrative Receiverships
- Deeds of Arrangement
- Trust DeedsProtected Trust DeedA trust deed is a voluntary but formal arrangement that is used by Scottish residents where a debtor grants a ‘trust deed’ in favour of the trustee which transfers their estate to the trustee for the benefit of creditors. It can be a way for people to deal with debt problems...
(only available in Scotland)