Individual Voluntary Arrangement-Insolvency Practitioners
Insolvency Practitioners are the legal and authorized individuals trained to deal with Insolvent individuals. Insolvency is a condition when an individual or a company becomes unable to pay the money he/she owes to another individual or a company.
Types of Insolvency
Insolvency can be of two types – Cash Insolvency and Balance Sheet Insolvency. Cash flow insolvency is a state where an individual has assets such as home and car but not enough cash to pay the debts. Balance Sheet insolvency is a state where the individual or company does not have assets to pay back the debts.
Individuals who have been trained in dealing with modern insolvency are called Insolvency Practitioners. This profession does not necessarily demand an accounting background or a lawyer degree but these educational qualifications can aid in the success of an Insolvency Practitioners.
In order to become an Insolvency Practitioners, one has to pass the JIEB exams. These exams are held once a year. An Insolvency Practitioner should be able to satisfy an organization or a company in matters related to insolvency.
What is Insolvency Practitioner?
An Insolvency Practitioner(IP) is the one who offers advice and suggestions regarding liquidation, bankruptcy, administration, rules and regulations of companies. She/he is free from the pressure of management and shareholders. They constitute independent bodies who take important decisions for the welfare of the company in difficult times. Their job is to save the assets of the company and favor the creditors. Furthermore, an IP is one who offers honest information regarding the company’s assets.
There comes a stage when a company is on the verge of death. The job of an IP is to protect the company and the Directors from personal liability issues. They can help reconstruct the company and bring back the balance between assets and liabilities. Voluntary liquidation is one of the most important aspects of striking back the balance of the company and its creditors.
An Insolvency Practitioner can offer the solutions such as partnership, liquidations, and debt clearance. She/he is an individual emotionally unattached from the business and capable of taking strong decisions after assessing the critical condition.
The Importance of IP
There are lessons to be learned for businesses. The job of an IP is to alarm the company against making the same mistakes repeatedly. History should not be repeated. He is the one that stabilizes a business going down, improves the cash flow of the entity, and brings a perfect union between the consumers and the providers.
All Businesses should be realistic. There should be a detailed analysis of the debts and profits incurred by the business in all aspects. An Insolvency Practitioner is an outsider who looks at the business from a unique perspective and offers solutions for the best interests of the creditors and companies. These professionals have been trained to look at all sides of the business unattached and offer best of their services for upliftment and betterment of the companies. The legal and authorized professionals who can bring back the assets of the business back into the game and offer excellent solutions for businesses.