Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Insolvency definition

What does Insolvency mean? In practice, insolvency describes a financial state where a debtor cannot meet liabilities when due, triggering remedies such as administration, liquidation or bankruptcy and informing directors’ duties and avoidance claims. For companies in England & Wales, Scotland and Northern Ireland, the Insolvency Act 1986, s 123 sets two alternative tests: - Cash‑flow insolvency: an inability to pay debts as they fall due. The inquiry is practical and forward‑looking, not confined to today’s bills (Re Patrick & Lyon Ltd [1933] Ch 786; BNY Corporate Trustee Services Ltd v Eurosail [2013] UKSC 28). - Balance‑sheet insolvency: liabilities (including contingent and prospective liabilities) exceed assets on...

Archived overview of the IPA Insolvency Practitioners' Handbook 2024 (England, Wales, Scotland and Northern Ireland): ethics code, SIPs, guidance papers, professional standards and anti-money laundering

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

ARCHIVED: This PrACTice Note has been archived and is not maintained.

What is the IPA?

The Insolvency Practitioners AssocIAtion (IPA) is an approved professional body responsible for granting authorisation (licensing) to insolvency practitioners (IPs) pursuant to the Insolvency Act 1986 (IA 1986). It is the sole recognised regulatory body devoted exclusively to insolvency. For more details, please consult the IPA website for further information.

What is the Insolvency Practitioners' Handbook?

The 12th edition of the Insolvency Practitioners' Handbook 2024 (England, Wales, Scotland and Northern Ireland) consolidates, in a single handy volume, the principal guidance and codes that IPs—and those preparing for insolvency exams—need readily to hand. Parts of the handbook may also assist solicitors in practice, particularly section 2 on Statements of Insolvency Practice (SIPs) in the UK. For more on SIPs, please see our Practice Note: Statements of Insolvency Practice—a quick guide.

The Insolvency Practitioners' Handbook comprises six core sections, each of which we link to here and can be accessed via this Practice Note. These links enable straightforward access within this Practice Note.

Introduction
Section 1—The

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Web page updated on 21/05/2026

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