Nothing worthwhile comes easily.
We often get asked what it takes to become a registered liquidator and what the interim steps are to progress as an insolvency practitioner.
The next question…why would someone want to work in the insolvency sphere?
A registered liquidator has a wide range of duties, which includes selling assets, investigating the company affairs, and paying a dividend to creditors. When a registered liquidator is appointed to a company, the director’s powers are suspended, and the registered liquidator assumes control of all company affairs. A registered liquidator is required to report not only to the creditors and members of the company, but also to the Australian Securities and Investments Commission (ASIC).
How to become a registered liquidator
Typically, an ungraduated degree takes three years full time. Not all degrees are created equal…Usually insolvency practitioners are required to study accounting.
Recognised Australian accounting industry body, or an international equivalent
Australia has three professional accountancy organisations recognised in legislation.
Chartered Accountants Australia and New Zealand (CA ANZ)
Institute of Public Accountants (IPA)
All three organisations largely perform these main functions:
Set educational requirements people must meet to earn and maintain their respective designations that lead to legally protected accountancy titles.
Require members to adhere to professional standards set by the Accounting Professional & Ethical Standards Board, the Australian Accounting Standards Board, and the Australian Auditing and Assurance Standards Board.
Maintain quality assurance review systems.
Investigate and discipline members for misconduct and breach of standards.
To become a fully qualified member of any of the three organisations will generally require further study over two to three years.
Insolvency specific professional association
Not all insolvency professionals choose to join an insolvency-specific professional association however the Australian Restructuring Insolvency and Turnaround Association (ARITA) represents professionals who specialise in the fields of restructuring, insolvency and turnaround. Around 80% of registered liquidators choose to be ARITA members. The ARITA Code is recognised by ASIC and courts as the default standard for professional conduct in insolvency matters.
Applicants often complete an advanced certificate in Insolvency and Restructuring and Turnaround (provided by ARITA in partnership with the University of Technology Sydney), which typically takes one year.
Of course, the usual requirements apply such as being a member of one of the three accounting bodies, or being a legal practitioner with sufficient insolvency experience, as well as being a fit and proper person with professional references.
Holding a certificate for public practice denotes an accountant has met the highest standards of knowledge and professionalism as they relate to public practice. Certification is not just a matter of making an application. All three accounting bodies require specific courses to be completed and need evidence of work experience and specialty knowledge.
To be eligible to apply via ASIC for registration as a liquidator a person must:
have adequate knowledge, skill and experience in insolvent corporate external administrations
have the diligence and good judgement to be capable of performing registered liquidator duties
be an honest person, a person of integrity, and have a good reputation.
An applicant must be able to provide evidence they have in the five years leading up to their application, been engaged in at least 4,000 hours of relevant employment at a senior level.
A committee within ASIC will interview the applicant and may require in addition an examination.
So why become a registered liquidator?
Every insolvency is burdened with strong emotions: creditors are understandably upset to learn of their loss; employees are often under substantial stress of losing future income and job security, and the unknown of what entitlements will be paid; some customers face lost deposits and/or incomplete jobs; and those at the centre of the insolvency carry the burden of responsibility and guilt.
That’s why our key message is “Together, we’ll deal with it. Insolvency that puts people first”.
Corporate insolvency solutions can give a helping hand to reach an arrangement with creditors, or a more formal insolvency process to rehabilitate the business through a small business restructure, a voluntary administration or wind up the business through a liquidation process.
So while it takes a lot of study, experience and effort to obtain registration as a liquidator, the insolvency and turnaround teams at Worrells are proud to give thoughtful and caring insolvency support in difficult times.