What are the key roles of insolvency Services?
March 05, 2020
An entity or a person is said to be insolvent they are not in a position to honor its financial obligations towards its creditors. Poor management of the business, increased expense, and reduced cash flow could lead to insolvency and the insolvent company is charged in order to pay off the debts owed and the company may be put to liquidation including the sale of assets. Fortunately, resolution approaches are available which includes restructuring of debt which allows the stressed company to pay off its debt over an extended period of time and on modified terms. A borrower can even negotiate with lenders on debt recovery and settlement agreements.
Insolvency Services can provide you with:
- Guidance and assistance in the various processes of legal disputes
- It is necessary to position a lawsuit immediately if a company goes into liquidation in order to increase the likelihood of a payout.
- To file claims on the company’s behalf, monitor progress and send ongoing reports
- Removal of international insolvency barriers such as different laws, languages and local procedures
An Insolvency Professional is an Indian Insolvency and Bankruptcy Board (IBBI) licensed professional. They are registered with an insolvency firm and are involved in the process of finding a resolution for an insolvent entity, company, LLPs or partnerships. These professionals are entitled to act on behalf of such insolvent individuals, businesses, etc. Insolvency practitioners play a vital role in liquidating the entity's properties and other forms for mediation during the restructuring case.
Insolvency professional's main functions are:
- Analyze the company’s financial statement to consider its status.
- Make plans for the selling of all private and corporate properties.
- Consider the company/individual's receivables position and take control of the collection process.
- Hold formal negotiations and handle the negotiation process with debtors/creditors.
- Check and consent to lenders’ statements in compliance with the funds available. This is one of the insolvency practitioners’ main duties.
- Involve in the distribution of funds after setting aside the money necessary to pay the liquidation costs.