The Role and Regulation of Insolvency Practitioners in the United Kingdom

If you’re considering closing your company or dealing with business debt, chances are you’ve come across the term “insolvency practitioner” or IP for short. But what exactly do they do, and how are they regulated?

In this blog, we’ll walk you through the key responsibilities of insolvency practitioners, how they are licensed, what standards they must follow, and why it’s so important to choose the right one. Whether your business is facing financial difficulty or you’re just weighing up your options, understanding the role of an IP can help you make the best decisions for your situation.

What Is an Insolvency Practitioner?

An insolvency practitioner is a qualified professional authorised to handle formal insolvency processes in the UK. This includes dealing with both solvent and insolvent companies, as well as individuals who may be facing personal bankruptcy.


In simple terms, an insolvency practitioner steps in when a business or person cannot pay their debts and needs legal and structured help to resolve the situation. Their role is to act in the best interests of creditors, make sure the law is followed, and ensure that assets are dealt with fairly and properly.

What Do Insolvency Practitioners Actually Do?

The specific tasks of an insolvency practitioner depend on the type of insolvency process being carried out. Here are some of the most common roles they take on.

1. Creditors’ Voluntary Liquidation (CVL)

When a company is insolvent and the directors choose to close it voluntarily, an IP is appointed to handle the liquidation. They will:

  1. Take control of the company
  2. Sell any assets
  3. Deal with creditors
  4. Distribute any funds based on legal priority

They also report on the conduct of directors and make sure everything is done in line with insolvency law.

2. Members’ Voluntary Liquidation (MVL)

This is for solvent companies where directors want to close in a tax-efficient way. The IP will:

  • Realise the company’s assets
  • Settle any outstanding debts
  • Distribute the remaining funds to shareholders
  • This route is often used during retirement or business restructuring.

Read Role and Regulation of Insolvency Practitioners in the United Kingdom


Location: United Kingdom

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