Business insolvency can be a very stressful and messy situation regardless of whether it has to do with a limited company, a partnership or a sole trader. When you choose a great IP, you can bring great changes into your business, regardless of how bad the situation really is. It can also affect the cost and the outcome of the matters that you are dealing with when a professional is working to make things better for you.
For most business owners, hiring an IP is not something they have experience in. Because of the roles the insolvency practitioners do, not many people want to engage them because they may still be in denial that there is actually a deep problem looming in their businesses. However, if a business is running into financial difficulties that are very serious and you have an insolvency threat, talking to an insolvency practitioner is the best and most prudent thing that you can do.
If you really want to help your business, then you need to accept that there is a problem that should be addressed as soon as possible. It can be hard for anyone in business to accept that there is indeed a problem coming and that they may be becoming insolvent.
You will know that you are becoming insolvent if you are unable to meet all the financial liabilities that you are supposed to fulfill. This should not be confused with having cash flow problems, but there is a very close connection between the two. A professional can tell you a lot about that is happening with the company and offer you the required support and advice.
Once you have positively identified the potential or actual insolvency, then the directors in the case of a limited company have a responsibility legally to protect all the creditor’s interest. At this point, you need an insolvency practitioner.
Who can take the role of an IP?
In most cases, an IP is an individual or a firm of IPs. Such a person need to be qualified and they need to pass different specialist exams. In most cases, such a practitioner is a lawyer or an accountant with the understanding of the law and the processes involved in insolvency.
Choosing the best practitioner
There are many ways in which you can locate a good IP and this includes associations and the government. You can also talk to a solicitor or accountant who can recommend someone or offer the services themselves. There are many costs that are associated with insolvency. Before you hire an IP, you should discuss deeply how costs could be calculated to come up with an estimate of the price. However, cost by itself should not be the only determination of the IP you choose.
There are many outcomes that have to do with insolvency and they requite experience and know how. It may help to get a reference from the clients who have already accessed services in the past.
Insolvency also involves business rescue. Even after the failure, the business can still be recovered. A qualified IP can recommend many options.