Would you let a surgeon operate on you without knowing they had a medical degree?
Would you let a builder construct your house without knowing they had a builders licence?
We’re guessing your answer is “No”. It might work out fine, but why take the risk when you can just as easily find someone you know is qualified.
And it’s the same when choosing an insolvency expert.
Some faceless operators try and sell liquidations by preying on the vulnerable, giving unqualified (and usually poor) advice, and even paying a Liquidator to do the work for a portion of their fee.
Unfortunately, while the Liquidator may well be qualified, the “middle man” operator may not be. And because they’re not regulated, insured or part of a professional code of conduct, it’s difficult to complain about them or have them independently investigated.
To avoid getting caught out with bad advice, here are 3 things to check before engaging an insolvency expert:
- Make sure they’re registered with the Australian Securities & Investments Commission (ASIC).
An Insolvency practitioner is an independent and suitably qualified person, not a company.
ASIC regulates licensed insolvency practitioners and Liquidators, and you can search their website to check the registration of a Liquidator.
For someone to become a registered Liquidator, ASIC checks:
- their qualifications, winding up experience and capability
- whether they are a fit and proper person
- whether they have been disqualified
- they have the required professional indemnity and fidelity insurance.
For more information on how ASIC administers the insurance requirements for registered liquidators, refer to Regulatory Guide 194 Insurance requirements for registered liquidators.
- Make sure they’re a member of the Australian Restructuring Insolvency & Turnaround Association (ARITA)
ARITA is the professional body for:
- insolvency practitioners in Australia
- those working in the field of business reconstruction and corporate and personal insolvency.
All ARITA practitioner members are bound by their Code of Professional Practice, which sets and manages standards of professional conduct. Maintaining and improving professional standards is one of ARITA’s core objectives, and members need to maintain their professional expertise by completing a minimum of 40 hours of Continuing Professional Development each year.
ARITA also has powers to investigate complaints against members in relation to their professional conduct as a practitioner.
Note: It’s important to search for members on the ARITA website, as some Registered Liquidators are not members of ARITA, and so don’t need to comply with the higher requirements of ARITA’s Code of Professional Practice.
- Make sure they’re a member of an accounting professional body
A liquidator needs to be a member of an Accounting Professional Body. In Australia there are two main ones: CPA and Chartered Accountants Australia and New Zealand (CAANZ).
At Rapsey Griffiths we understand how important this is. That’s why all of our Liquidators are:
- members of CAANZ, and required to comply with their code of conduct
- regulated by the Australian Accounting Standards Board
- required to hold current and acceptable level of professional indemnity insurance and fidelity insurance.
By conducting these checks you’ll find a qualified insolvency practitioner who can determine whether of not your company is insolvent, and outline all available options so you can make an informed decision about your company’s future. Depending on your company’s financial situation, those options could include:
- restructuring or changing your company’s activities
- appointing an external administrator.
Going through insolvency is difficult enough without receiving bad advice. So if you need any more information about conducting these checks or finding a qualified insolvency practitioner, don’t hesitate to get in touch with us.