The new insolvency bills are now in place, meaning that liquidators have to be licensed. This brings in tighter regulation, mandatory standards and stronger protections against abuse.
The changes are implemented through the Insolvency Practitioners Regulation Act 2019, amendments to the Companies Act 1993 and the Receiverships Act 1993, as well as new regulations.
Practitioners who are accredited at the time of the commencement will automatically be granted a four-month transition in which to apply for a licence, with an additional approximately eight months for licence applications to be processed.
The Registrar of Companies will be responsible for establishing and maintaining a public register of licensed insolvency practitioners.
A person acting as an insolvency practitioner without a licence may be liable to a fine of up to $75,000.
What this means for many is that the business of liquidating your company will now be safer in terms of not ensuring that you haven’t appointed a ‘cowboy’ liquidator – however, that comes with its own difficulties.
Liquidators will now be regulated, professional and backed by licensing and professional bodies – it may be more difficult to make ‘gentleman’s agreements’ on shareholder accounts and asset purchases. They may use lawyers to make demands and this can become unsettling for many.
It may be that you need assistance in dealing with the more rigid structuring and rules – and that is where we can help.
We assist our clients in communication with the liquidator, asset and plant ‘buy backs’ and commercial settlements on shareholder current accounts.
Don’t go it alone, we can help. Call us today on 0800 706 960 for a free, initial consultation.