Navigating the Roles and Responsibilities of an Insolvency Specialist
Is your company struggling to meet its financial obligations or facing a threat of seizure of assets? It’s time that you employ the services of an insolvency specialist. They help assess your company’s situation and guide you on the best course of action. These include liquidation or company voluntary agreement, all while being ethical and professional. If you are considering employing an insolvency specialist, you are in the right place. Read on and discover their roles and responsibilities.
Roles of an Insolvency Specialist
Insolvency specialists can take up various roles depending on a company’s needs. Here are a few of these roles:
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Liquidator
A company’s directors may decide to close down their company. This can be due to several reasons, such as wanting to retain the profits made or facing debts that are difficult to manage. If they decide on retaining profits, an insolvency practitioner carries out a Members’ Voluntary Liquidation. If debts are unmanageable, they will carry a Creditor’s Voluntary Liquidation.
The work of an insolvency practitioner doesn’t end there. They are responsible for raising capital by liquidating assets and accounts owned by the company. Once liquidated, they must ensure to close down the company and remove it from the company’s register.
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Administrator
Company directors may decide on placing their company into administration. This is where an insolvency practitioner comes in. They assume much control of the company as they deal with the operations to get the company back on track.
If this option doesn’t work, it’s best if the directors sell the business and its assets in such a situation. Similarly, this will make it easy to pay off creditors.
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Company Voluntary Arrangement (CVA)
Company directors may decide to keep the company operating even in financial distress but still pay off debtors. In such a case, an insolvency specialist assists with a CVA.
The specialist negotiates with creditors on new terms to settle debts. This allows a company to stay in operation and have good relations with creditors without liquidating.
Responsibilities of an Insolvency Specialist
Many accounting firms in Australia offer the services of insolvency specialists. However, ensure that they depict the following responsibilities:
- Integrity- An insolvency specialist must be straightforward and honest in all dealings.
- Complying with Laws and Regulations- They should ensure to be up to date on all legislation and current market practice.
- Objectivity- They should never show bias or allow a conflict of interest to override their professional decisions.
- Demonstrate Professionalism- Their behaviour should reflect the high standards of professionals. They should be courteous and considerate to those they encounter while performing their roles.
- Confidentiality- An insolvency practitioner should be confidential in all client matters. During their appointment to help a company, they must refrain from using a firm’s information elsewhere.
Conclusion
It’s challenging if a company is facing financial distress. While many company directors may opt for liquidation, an insolvency specialist will help navigate this issue. They analyse your company’s situation and offer objective guidance on the way forward.
You will need them, whether for a Company Voluntary Agreement or as an administrator. Thus, choose an accounting firm that understands the importance of an insolvency practitioner in restoring the financial stability of your company.
