Licensing of insolvency practitioners

Who must be licensed

Anyone acting as an insolvency practitioner must hold a licence issued by an accredited body. Licensed practitioners must act in accordance with the conditions of that licence.

An insolvency practitioner includes the following categories of people:

• the liquidator of an insolvent body corporate in liquidation
• the administrator or deed administrator of a company in voluntary administration
• a receiver
• a trustee or provisional trustee of personal insolvency creditor proposals.

For more information, see the interpretation sections of the:

• Insolvency Practitioners Regulation Act 2019
• Companies Act 1993
• Receiverships Act 1993 and
• Insolvency Act 2006 .

Who does not need to be licensed

The following roles or activities do not fall under the scope of the regulatory regime:

• debt repayment order/summary instalment order supervisors
• those giving advice about corporate or personal insolvencies (but not actually acting as an insolvency practitioner)
• those providing restructuring and turnaround advice, and services prior to insolvency
• budgeting advice services
• management of solvent liquidations if you are:
  • a lawyer
  • a qualified statutory accountant
  • members of recognised professional bodies.

You don’t need an insolvency practitioner’s licence if you only do these types of activity.

How to become licensed

You must apply to an accredited body if you want to be a licensed insolvency practitioner; the Registrar has no role in licensing decisions.

Qualifications

In order to be licensed, you must meet the minimum standards set out in the Insolvency Practitioners Regulation Act (Prescribed Minimum Standards, Conditions, and Requirements for Ongoing Competence, for Licensed Insolvency Practitioners) Notice 2020 (the Minimum Standards Notice). This includes experience requirements and continuing professional development obligations.

You must also meet any membership criteria set by the relevant accredited body.

Do you need to be an accountant?

Insolvency practitioner licences are not limited to accountants. However, administering insolvency engagements does require accounting experience. The Minimum Standards Notice therefore distinguishes between accountants holding Certificates of Public Practice (CPP) and others. Non-CPP holders must have 2,000 hours of senior insolvency engagement experience over the last 3 years. CPP holders must have 1,000 hours; this lower figure reflects the other accounting experience required to hold a CPP.

If you are not a member of an accredited body (NZICA), then you must be a member of a Recognised body (RITANZ) before you can apply to the accredited body to become a licensed insolvency practitioner.

The Registrar has no role in licensing decisions; the Registrar cannot overrule accredited bodies’ decisions to grant or refuse an insolvency practitioner’s licence. The Act provides that any challenge to a licensing decision must be appealed to the High Court (see section 21 ), not the Registrar.

Appointments prior to 1 September 2020

Existing insolvency engagements (except insolvent liquidations of bodies corporate)

Insolvency practitioners appointed to act in respect of insolvency engagements before 1 September 2020 (except liquidators of insolvent body corporates) may complete those existing engagements, without an insolvency practitioners licence, indefinitely. This includes solvent liquidations, receiverships, voluntary administration and personal insolvency creditors proposal trustees. Insolvency practitioners must not be appointed to act in respect of any new insolvency engagements from 1 September 2020 without obtaining a licence.

For further information, see schedule 1 of the Insolvency Practitioners Regulation Act 2019 .

Overseas insolvency practitioners

The regulatory regime applies to all insolvencies in New Zealand, regardless of where the insolvency practitioner is based. Overseas insolvency practitioners must obtain a New Zealand insolvency practitioner’s licence before acting in a New Zealand insolvency.

Special provisions apply to insolvency practitioners licensed in Australia. A licensed Australian practitioner may temporarily act in a New Zealand insolvency, while applying for a New Zealand licence. Australian licensed insolvency practitioners must apply for a New Zealand licence within 10 days of being appointed to act in a New Zealand insolvency.

For further information, see section 10 of the Insolvency Practitioners Regulation Act 2019 .

Special provisions may also apply to other overseas insolvency practitioners in the future. However, the special provisions are currently limited to Australian licensed practitioners.

Liquidations of solvent bodies corporate

Liquidations of solvent bodies corporate may be carried out by:

• a licensed insolvency practitioner
• a lawyer
• a qualified statutory accountant
• members of recognised professional bodies.

To be a solvent body corporate, the directors of the body corporate must make a declaration that, following due enquiry, the body corporate will be able to pay its debts in full within 12 months. See further in the new section 243A of the Companies Act 1993 .

Liquidations of bodies corporate that are insolvent must be carried out by a licensed insolvency practitioner.

No exemptions from licensing requirements

Anyone acting as an insolvency practitioner must be licensed. The Registrar or an accredited body cannot grant an exemption from the licensing requirements.

Last updated 28 September 2023