What are Statements of Insolvency Practice?
In the world of corporate insolvency, there are a number of regulatory bodies and hundreds of insolvency practitioners. Given the importance of the work, namely saving companies, protecting livelihoods and ensuring creditors are paid the money they are owed, it’s essential there is a single set of standards all insolvency practitioners must meet. This standardises the approach different practitioners take to particular aspects of the work and ensures service levels are maintained across the industry.
These standards are known as the Statements of Insolvency Practice, which are issued to licensed insolvency practitioners by the recognised professional bodies and the Insolvency Service. They set out the basic principles and essential procedures insolvency practitioners must meet.
What do Statements of Insolvency Practice Cover?
Statements of Insolvency Practice cover a whole range of insolvency subjects and procedures. That includes everything from the use of pre-pack arrangements (SIP 16) and office holder remuneration (SIP 9), to the disqualification of directors (SIP 4) and the decision-making procedures that can be used in insolvency proceedings (SIP 6).
Who are the SIP Produced by?
The Statements of Insolvency Practice are produced by R3, the Association of Business Recovery Professionals, approved by the Joint Insolvency Committee and then adopted by each of the regulatory authorities listed below:
- The Association of Chartered Certified Accountants
- The Institute of Chartered Accountants in England and Wales
- The Institute of Chartered Accountants in Ireland
- The Institute of Chartered Accountants of Scotland
- The Insolvency Practitioners’ Association
- The Law Society
- The Law Society of Northern Ireland (for Northern Ireland only)
- The Law Society of Scotland
What Happens if the SIP are not met?
Although they are not definitive statements of law, the Statements of Insolvency Practice set out the basic principles and essential procedures that insolvency practitioners must comply with. Failure to meet the standards set out in the statements is a matter that can be brought to the attention of the professional body that licences the particular insolvency practitioner. The insolvency practitioner can then face disciplinary or other regulatory action.
The full list of Statements of Insolvency Practice
- SIP 1 – An Introduction to Statement of Insolvency Practice
- SIP 2 – Investigations by Office Golders in Administrations and Insolvent Liquidations
- SIP 3.2 – Company Voluntary Arrangements
- SIP 3.3 – (Scotland) Trust Deeds
- SIP 4 – Disqualification of Directors
- SIP 5 – Guidance out of date
- SIP 6 – Decision-Making in Insolvency Proceedings
- SIP 7 – Presentation of Financial Information in Insolvency Proceedings7
- SIP 8 – Superseded by SIP 6
- SIP 9 – Payments to Insolvency Office Holders and their Associates
- SIP 10 – Superseded by SIP 6
- SIP 11 – The Handling of Funds in Formal Insolvency Appointments
- SIP 12 – Superseded by SIP 6
- SIP 13 – Disposal of assets to Connected Parties in an Insolvency Process
- SIP 14 – A Receiver’s Responsibility to Preferential Creditors
- SIP 15 – Reporting and Providing Information on their Committees and Commissioners
- SIP 16 – Pre-packaged Sales in Administrations
- SIP 17 – An Administrative Receiver’s Responsibility for the Company’s Records
Are you considering a formal insolvency procedure for your business? Perhaps you’d like to discuss your circumstances confidentially with an impartial expert? For a free, no-obligation consultation, please 08000 746 757 or email: [email protected] today.