An insolvency practitioner – sometimes abbreviated to IP – is someone who is licensed to act on behalf of companies and individuals when they are facing insolvency or acute financial distress. An IP is also able to help directors of solvent companies who have chosen to liquidate their company by way of a Members’ Voluntary Liquidation (MVL) in order to extract held profits.

In the majority of cases, a company director will voluntarily approach an IP and enlist their help in dealing with their distressed company. In matters of compulsory liquidation, the courts will appoint an Official Receiver who will act as the provisional liquidator. They may later request that an insolvency practitioner be appointed to take the liquidation forward.

Acting as a liquidator in both solvent and insolvent company liquidations, the insolvency practitioner’s role here is to realise company assets and ensure these are distributed appropriately to creditors. In insolvent liquidations such as Creditors’ Voluntary Liquidations (CVLs), creditors typically comprise of suppliers, banks, and other lenders; in an MVL, which is the liquidation of a solvent company, it is directors and shareholders who are often in line to receive the proceeds.