Choosing an insolvency adviser: how to check a licence and what to ask

When a business is in trouble with IRD, the people who appear first are often insolvency firms. Many of them do careful, essential work, and if your company can’t continue, a good licensed practitioner is exactly who you need. But the decision to appoint anyone is one of the most important you’ll make as a director, so it’s worth knowing how the system works and how to check who you’re dealing with.

Who has to be licensed?

New Zealand introduced a licensing regime for insolvency practitioners under the Insolvency Practitioners Regulation Act 2019. The public register opened on 1 September 2020, and after a transition period ended on 1 September 2021, formal insolvency work — voluntary administrations, receiverships and insolvent liquidations among it — has to be carried out by a licensed insolvency practitioner (RITANZ). Solvent liquidations can still be done by qualified statutory accountants and lawyers.

How do you check a licence?

Use the insolvency practitioners register on the Companies Office website (Companies Office). Ask the practitioner for their full name as registered, then search for it. If someone offers to act as liquidator or administrator of an insolvent company and isn’t on the register, don’t proceed.

Who oversees practitioners?

Body	Role
NZICA (part of CA ANZ)	The accredited body since 18 August 2020: licenses practitioners and handles complaints
RITANZ	A recognised professional body for restructuring and insolvency
Companies Office (Registrar)	Runs the register and oversees the regime
The courts	Can review liquidator conduct and pay

NZICA handles public complaints about “breaches of professional standards, lack of competence, or overcharging” (Companies Office).

What professional standards apply?

The NZ Insolvency Services Standard, effective from 1 November 2021, prohibits “accepting commissions, referral fees and other types of inducements”, requires members to decline to advise an insolvent entity on how to structure its affairs so assets become unavailable to creditors, and strengthens independence and fee-transparency rules (CA ANZ).

Why was licensing introduced?

Background papers from before licensing, including a 2016 MBIE Cabinet paper, described concerns about some practitioners overcharging, doing unnecessary work or not protecting creditors’ interests, along with phoenix activity. That’s history, not a description of today’s market, but it explains why the regime exists and why checking credentials is worthwhile.

Talk to a funder before you appoint anyone. If IRD can be paid, you may not need an appointment at all. Start here, with no credit check to enquire.

What should you ask before you sign?

1. Are you a licensed insolvency practitioner? What’s your name on the register?
2. Will you or your firm take the appointment? Who will you work for once appointed? (Creditors.)
3. How are fees worked out, who pays them, and can I have a written estimate?
4. Have you looked at whether the business could pay or refinance IRD, or set up an instalment arrangement first?
5. What happens to my personal guarantees and my shareholder current account?
6. Will my conduct as a director be investigated, and what records will you need?
7. Could any part of your plan breach the phoenix rules or count as moving assets away from creditors?
8. If I’m unhappy with your service or fees, where can I complain? (NZICA.)

Our printable checklist has these questions with space for answers.

What about advisers who aren’t insolvency practitioners?

You’ll also find tax debt negotiators, “business rescue” consultants and others. Some are qualified accountants or lawyers; some aren’t. We’re not aware of a specific NZ licensing regime for tax debt negotiators, so ask about qualifications, fees in writing and what happens if their approach fails. Unlike Australia, New Zealand doesn’t have an official government warning about “pre-insolvency” advisers, but the same common-sense checks apply. See warning signs.

Where do we fit?

We’re a business lender. We don’t take appointments, we don’t earn anything if a company is liquidated, and we’ll tell you if we think the business can’t be saved and you’d be better speaking to a licensed practitioner or your accountant. What we can do is give you a fast, clear answer on whether funding could clear IRD, so that any decision about insolvency is made with every option on the table. Read before you call anyone.

How do you get the most from a first meeting?

Bring the facts, and bring a second person if you can: a co-director, partner or your accountant. Useful things to have on the table:

• your myIR statement and any IRD letters, especially a statutory demand or liquidation application;
• the latest financial statements and a list of creditors;
• a list of personal guarantees and the shareholder current account balance; and
• any funding answer you’ve already had.

Take notes, ask for the fee estimate and engagement terms in writing, and don’t sign at the first meeting unless a court deadline genuinely requires it. A good practitioner will understand. If you feel rushed, that’s useful information too.

Is a free consultation a conflict of interest?

Not necessarily. Many reputable firms offer an initial meeting at no cost, and practitioners are bound by independence and fee-transparency rules. But it’s worth remembering that a firm that may later take the appointment has an interest in the outcome. That’s why it helps to hear from your accountant, your lawyer and a funder as well, so the decision rests on more than one view.

Make the call in the right order

If you’re about to meet an insolvency adviser about IRD debt, talk to us first. An enquiry doesn’t involve a credit check, your details aren’t passed to other lenders or advisers, and a real person will call you. Be as accurate as you can about the debt and any property, so you walk into that meeting knowing whether funding is a real alternative.