Insolvency Solicitor vs. Insolvency Practitioner: What Is The Difference?
An insolvent company will require the services of a licensed insolvency practitioner (IP) to help it through the liquidation process. The role of an IP is essential when companies become insolvent. However, more often than not, these experts won’t be the only professionals involved and there will also be an insolvency solicitor working on the case. What are the practical differences between the two and who should you seek out for what?
What Is An Insolvency Solicitor?
An insolvency solicitor is a qualified legal professional who specialises specifically in the field of insolvency. Their role is to provide their clients with guidance on legal matters that may arise as part of a business becoming insolvent. These types of problems that can arise are extremely varied and entirely depend on the individual circumstances of the company in question.
The duties of an insolvency solicitor may include:
- To provide advice to creditors or any other relevant parties regarding questions or disputes regarding the insolvency process.
- To provide counsel about any legal action being taken against the insolvent company.
- To engage in negotiations with creditors on behalf of their client to reach a settlement or agreement.
- To ensure that their clients do not fall into any legal pitfalls and act in accordance with insolvency laws.
- To provide legal representation in any court proceedings related to the insolvency of the company.
What Is An Insolvency Practitioner?
Unlike an insolvency solicitor, an insolvency practitioner is a licensed professional who will undertake a variety of roles on behalf of an insolvent company. These duties will vary depending on the exact circumstances of their appointment, but will likely include:
- Implementation and management of insolvency procedures. This includes placing the company into creditors’ voluntary liquidation, entering a process of administration, or potentially forming a scheme of arrangement.
- Advise all relevant parties in the shutting down, sale, or rescue of an insolvent company.
- Organise and manage meetings with creditors.
- Distribute assets and funds to creditors as per the order of creditors in company liquidation.
- Formally close the company by applying for it to be struck off the Companies House Register.
For more information, you can read our previous post on what insolvency practitioners are and what they do.
Who To Consult
If your company is insolvent, the first thing that you’ll want to do is get in contact with an IP as soon as possible, who will be able to advise you on the next steps that you should take. If you instead need counsel in regards to legal action, or your IP recommends that you seek legal instruction, it is then well worth seeking out the services of an insolvency solicitor.
If you’re concerned that your company is approaching insolvency or already is, be sure to contact our team at My Liquidation. Our extensive experience as insolvency practitioners allows us to deliver professional and confidential advice that is 100% tailored to the individual needs of you and your company. Whatever your situation, we will help you to figure out the best steps to move forward.