Insolvency practitioners are those licensed to help insolvent companies (or individuals) facing financial difficulty.
In this article we’ll explore in depth their role and how they can help.
What is an Insolvency Practitioner?
A licensed insolvency practitioner (IP) has a wide range of duties about companies that are struggling financially.
In the first instance, an insolvency practitioner can provide company directors with professional advice in pre-insolvency situations to try and rescue a business and keep it on track. At the other end of the spectrum, where a company is insolvent, an IP could be appointed to take complete control of the company before closing it down.
What is the aim of an Insolvency Practitioner?
An IP’s aim depends on the role they hold. An administrator acts in the interests of the creditors as a whole. They must aim to rescue the company as a going concern, unless they think that is not reasonably practicable, or that a better result for the creditors as a whole can be achieved another way. A liquidator’s job is to realise the company’s assets and distribute the proceeds to creditors, with any surplus going to the shareholders. In a CVA, the nominee reports on the proposal and the supervisor oversees the arrangement once it is approved.
Where an IP is appointed liquidator, they will:
- Sell company assets to repay creditors;
- Collect money owing to the company from debtors;
- Agree creditors’ claims;
- Distribute the money collected after the costs of insolvency have been paid.
How many Insolvency Practitioners are There in Great Britain?
At 1 January 2026, about 1,480 insolvency practitioners were authorised by the recognised professional bodies in Great Britain, and about 1,262 of them could take appointments. The Insolvency Service publishes the current number each year, and its register will tell you whether any particular practitioner holds a licence, which is the question that actually matters when you are choosing one.
How Do I Find an Insolvency Practitioner?
You can use the internet find a licensed practitioner; confer with your accountant, or use the Insolvency Service website here.
How do Insolvency Practitioners Work?
The role of the insolvency practitioner is to act as a professional intermediary in all proceedings. This instils a greater confidence in creditors, including HMRC, and helps to achieve the goal they are working towards. In all roles, the insolvency practitioner is required to abide by a code of conduct that provides professional and ethical guidance. Once appointed, the administrator or liquidator of an insolvent company must act with reasonable skill and care in the interests of the company’s creditors as a whole. They do not represent the directors.
An insolvency practitioner can advise that a company liquidation is the right course, but giving that advice does not make them the liquidator. In most cases the shareholders resolve to wind the company up, or the court orders it. The liquidator is then chosen in the way the next section explains.
What is a Liquidator?
The most important thing to note is that insolvency practitioners and liquidators are not mutually exclusive – they can be one and the same thing. In a creditors’ voluntary liquidation, the directors can propose winding up, but the shareholders decide by special resolution. The company nominates a licensed insolvency practitioner as liquidator, and the directors must seek a nomination from the creditors. If the creditors nominate someone different, their nominee ordinarily becomes liquidator. The liquidator acts for the creditors, not the directors. Directors often make their proposal after initial advice from an insolvency practitioner.
Once appointed through that process, the insolvency practitioner becomes the ‘liquidator’. It then becomes their job to collect and sell the assets of the company, distribute the money to the company’s creditors in the order of priority set by law, aiming for the best return they can achieve. Creditors lower down that order may receive little or nothing.
However, it is not only insolvency practitioners who can act as company liquidators. In a compulsory liquidation in England and Wales, where a company is wound up by the court following a petition by a creditor, the official receiver becomes liquidator when the winding-up order is made. The exception is where the court appoints the outgoing administrator or CVA supervisor as liquidator instead. The official receiver is a civil servant, not a licensed insolvency practitioner. While acting as liquidator, the official receiver can ask the Secretary of State to appoint a private insolvency practitioner in their place, for example where the case needs that practitioner’s skills and resources. The appointment is then made by the Secretary of State. Alternatively, the company’s creditors can vote to appoint their insolvency practitioner to act as the liquidator if they think the IP will better protect their interests.
Who Appoints an Insolvency Practitioner?
Who appoints the insolvency practitioner depends on the procedure:
- The company or its directors, or the holder of a qualifying floating charge, can appoint an administrator
- Shareholders appoint the liquidator in a members’ voluntary liquidation, and nominate one in a creditors’ voluntary liquidation
- Creditors can nominate the liquidator in a creditors’ voluntary liquidation, where their choice ordinarily prevails, and in a compulsory liquidation
- The Secretary of State, on the official receiver’s application in a compulsory liquidation
- The court, which can make an administration order or appoint a provisional liquidator. After a winding-up order in England and Wales the official receiver becomes liquidator, unless the court appoints the outgoing administrator or CVA supervisor instead, and a licensed insolvency practitioner may be appointed in the official receiver’s place later
Is a Liquidator an Insolvency Practitioner?
Usually, yes. A liquidator is ordinarily a licensed insolvency practitioner, and liquidation is one of several roles an insolvency practitioner can hold. The main exception is a compulsory liquidation, where the official receiver becomes liquidator (unless the court appoints the outgoing administrator or CVA supervisor) and is not a licensed insolvency practitioner.
In addition, IP’s may be involved in company rescue procedures such as administration or company voluntary arrangement.
How do Insolvency Practitioners Make Money?
IP’s have a duty to be responsible and transparent around their fee structure, and how they charge their time.
In England and Wales, an office-holder’s fees are fixed as a percentage of the assets realised or distributed, by reference to time spent, as a set amount, or as a mix of these. In an insolvent case the creditors or their committee normally approve the basis. In an administration where unsecured creditors will receive nothing beyond the prescribed part, the secured creditors (and the preferential creditors, if they are to be paid) can approve it instead. In a members’ voluntary liquidation the shareholders approve it. If the basis is not fixed in that way, an administrator or a liquidator in a voluntary liquidation must apply to the court to fix it. In a compulsory liquidation, the official receiver’s remuneration is set by a statutory scale. Where a private insolvency practitioner is liquidator, the creditors’ committee or the creditors fix the basis. If the creditors do not, the liquidator is paid by the statutory scale. The court can later be asked to increase or change a basis already fixed.
Read more in our article on insolvency practitioner fees.
Need help?
If you require advice from an Insolvency Practitioner, please call 0208 444 3400 or complete our enquiry form.