Business Advice
The duties of an insolvency practitioner
During hard economic times, many businesses are unable to pay their creditors, which can lead to the company becoming insolvent. At such times, it is important for the directors to involve a professional insolvency practitioner otherwise they might be liable to charges of insolvent trading. This process is referred to as putting the business in administration. The practitioner’s duties involve reviewing the operations of the business to find out the best way to move forward. This usually takes a maximum of eight weeks. The practitioner is expected to produce a report detailing how the company can be recovered and if not, the reason why this would not be possible. The insolvency practitioner usually proposes radical measures such as employee redundancy to cut daily costs helping the company recover from its financial woes. The insolvency practitioner can also arrange for a CVA with the creditors. The arrangement gives the business to pay its creditors in affordable monthly installments. Apart from this, the practitioner can also propose the sale of part or the whole business.