Business insolvency is definitely not one of the best things for any organization. Insolvency happens when the company is not able to pay back its debts.
There are two types of insolvency:
1. Cash-flow insolvency
2. Balance sheet insolvency
In both conditions, you would need the assistance of an insolvency practitioner. He is the person who has been authorized by the government to perform activities related to finance, liquidation and administration. Most of the companies have insolvency practitioners, and they are paid well. Even a start-up business would need the assistance of an insolvency practitioner.
However, many companies don’t feel the need to hire an insolvency practitioner until the situation arises. So, the first step that you need to take is to understand that you need an insolvency practitioner and then proceed to start your search for finding the best one. If your firm is not able to meet the financial liabilities and you are wondering what should be the best move here, then you need the assistance of an insolvency practitioner.
When does the need for hiring an insolvency practitioner to arise?
Financial issues may arise in any company at any point of time. So, sometimes the matter has to be transferred in the hands of a professional and efficient insolvency practitioner who can have a closer look at it, and suggest the right rectifying measures. There can be times when the company needs to liquidate or declare bankruptcy. In this case, you need the help of an insolvency practitioner. It is never too early to take suggestions from an insolvency practitioner; they will help you make the right decision for the benefit of your company.
Here are some of the key factors that you need to consider when hiring an insolvency practitioner:
1. Choose a licensed practitioner
If you are hiring an insolvency practitioner, then your key focus should be to hire the one who has a license. This license is issued by the government, thereby authorizing the practitioner to perform his/her duties.
Another area of your focus should be to choose an insolvency practitioner who has a professional approach. They must be skillful. Experience counts the most in this. Check for how long they have been in the business and what kind of work they have handled previously. At this point, we would also like to highlight the fact that an experienced insolvency practitioner will charge more but you will be assured to get the best and right assistance.
While hiring an insolvency practitioner, you must not miss asking their fees. Different practitioners will have different rates, and based on your budget you can decide whether to ask a practitioner to take up your work or not.
What are the different work duties taken up by an insolvency practitioner:
- A professional practitioner will work in the interest of the company
- They will rightly represent the company
- Maximize the rate of return to the creditors
- Take care of the financial matters of the company
- Have an eye for details and will keep a check on any fraudulent activities
Well, the internet is the best medium to find the best insolvency practitioner, but if you are not well-versed with the information related to it, then it’s always good to find the best insolvency practitioner through references. You can shortlist a few options. Once you have shortlisted, you must speak to them to get to know about the knowledge and skill of insolvency practitioners.
We have discussed a few of the factors above. Make sure that you hire only the best in the business. Check their reviews and ratings; their certification is mandatory and you must add it to your checklist. Once you have all the options ticked positive, then you can proceed and hire the insolvency practitioner.