Licensed Insolvency Practitioners are specially trained accountants who deal with business and personal insolvency. They are regulated and trained by an authorising body, such as the Institute of Chartered Accountants in England and Wales.
Practitioners are trained to give the best advice to directors and business owners who want to rescue their businesses before a formal insolvency procedure is needed.
In most cases, businesses realise they have financial problems because they cannot pay their debts as they fall due, and are constantly being chased by suppliers for payment of debt. The cause may be due to trading losses, or simply cash flow problems.
A company could be placed into Administration for one of three reasons. One is to save the company as a going concern, the second is to get a better return than just liquidation and the third reason is to repay a secured creditor such as the bank. In all cases, it means the company is insolvent.