The sections, word for word
Every section on this subject, exactly as printed in the Official Gazette (Act No. 3 of 2020). The explanation follows beneath.
Section 704. Acting as insolvency practitioner
A person acts as an insolvency practitioner in relation to a company by acting as its—
(a) liquidator, provisional liquidator or official receiver ;
(b) administrator or administrative receiver ; or
(c) receiver and manager, or as nominee or supervisor of a company’s voluntary arrangement.
Section 705. Qualification of insolvency practitioner
(1) A person is only qualified to act as an insolvency practitioner where he—
(a) has obtained a degree in law, accountancy or such other relevant discipline from any recognised University or Polytechnic ;
(b) has a minimum of five years post qualification experience in matters relating to insolvency ;
(c) is authorised to so act by virtue of a certificate of membership issued by Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN), or his membership of any other professional body recognised by the Commission, being permitted to act by or under the rules of that body ; and
(d) holds an authorisation granted by the Commission.
(2) The Commission may prescribe in its regulations such other additional qualifications as may be considered necessary.
Section 706. Recognition of professional body by the Commission
(1) The Commission may, by an instrument or order, declare a body which appears to it to fall within subsection (2), to be a recognised professional body for the purposes of this section.
(2) A body may be recognised if it regulates the practice of a profession and maintains and enforces rules for securing that its members—
(a) are permitted by or under the rules to act as insolvency practitioners ;
(b) are fit and proper persons to act ; and
(c) meet acceptable requirements as to education and practical training and experience.
(3) References to members of a recognised professional body are to persons who, whether members of that body or not, are subject to its rules in the practice of the profession in question.
(4) An instrument or order made under subsection (1) in relation to a professional body may be revoked by a further order if it appears to the Commission that the body no longer falls within subsection (2).
Section 707. Application for authorisation to act as insolvency practitioner
(1) Application may be made to the Commission for authorisation to act as an insolvency practitioner, and the application shall—
(a) be made in such manner as the Commission may specify ;
(b) contain or be accompanied with a certificate of membership issued by BRIPAN or any other professional body approved by the Commission and such information as the Commission may reasonably require for the purpose of determining the application ; and
(c) be accompanied by the prescribed fee in the regulations issued by the Commission.
(2) At any time after receiving the application and before determining it, the Commission may require the applicant to furnish additional information.
(3) An application may be withdrawn before it is granted or refused.
Section 708. Commission to notify the party of the refusal or withdrawal of authorisation
(1) The Commission may, on an application duly made and after being furnished with all such information as it may require, grant or refuse the application.
(2) The Commission shall grant the application if it appears to it from the information furnished by the applicant and having regard to such other information, if any, that the applicant—
(a) is a fit and proper person to act as an insolvency practitioner, and
(b) meets the prescribed requirements with respect to education and practical training and experience.
(3) An authorisation granted pursuant to the application shall take effect from the date of grant by the Commission.
(4) Authorisation granted may be withdrawn by the Commission if it appears to it that the holder of the authorisation is no longer a fit and proper person to act as an insolvency practitioner.
(5) An authorisation granted may be withdrawn by the Commission at the request or with the consent of the holder of the authorisation.
Section 709. Review of Commission’s decision
(1) Where the Commission refuses an application or withdraws an authorisation it shall within seven days notify the party in writing stating the reasons for the refusal or withdrawal of the authorisation, and the party affected within 21 days of the receipt of the notification may apply by summons on notice to the Court having jurisdiction in insolvency matter, for a review of the decision of the Commission and the Court, upon hearing the summons, may refuse or grant the summons on such terms as it deems fit.
(2) An appeal from the decision of the Court shall lie to the Court of Appeal and the decision of the Court of Appeal is final.
What this means
Short answer
Only a qualified, authorised person can act as an insolvency practitioner, meaning as liquidator, administrator, receiver and manager, or nominee or supervisor of a voluntary arrangement (sections 704 and 705). He needs a law, accountancy or related degree, five years’ post-qualification experience in insolvency, membership of BRIPAN or another recognised body, and the Commission’s authorisation (section 705).
Amended since the gazette
The Business Facilitation Act 2023 deleted the definition of an insolvency practitioner from section 868, so that members of BRIPAN and other recognised bodies are not excluded. See all the amendments.
What counts as acting
A person acts as an insolvency practitioner by acting as liquidator, provisional liquidator or official receiver, as administrator or administrative receiver, or as receiver and manager, or as nominee or supervisor of a company voluntary arrangement (section 704).
Who is qualified
- a degree in law, accountancy or another relevant discipline from a recognised university or polytechnic;
- at least five years’ post-qualification experience in matters relating to insolvency;
- authority to act through a certificate of membership of the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN), or membership of another professional body the Commission recognises, being permitted to act by that body’s rules; and
- an authorisation granted by the Commission (section 705(1)).
The Commission can prescribe further qualifications in regulations (section 705(2)).
Recognised professional bodies
The Commission can declare a body recognised if it regulates a profession and keeps and enforces rules that let its members act as insolvency practitioners, ensure they are fit and proper, and ensure they meet acceptable education, training and experience requirements. It can revoke recognition if the body no longer meets the test (section 706).
Applying for authorisation
An application is made to the Commission in the way it specifies, with a BRIPAN or other approved body certificate, the information the Commission reasonably requires and the prescribed fee. The Commission can ask for more information, and the applicant can withdraw before a decision (section 707). The Commission must grant authorisation if the applicant is a fit and proper person and meets the education, training and experience requirements. It takes effect from the date of grant, and can be withdrawn if the holder is no longer fit and proper, or at his request or with his consent (section 708).
If the Commission refuses or withdraws
The Commission must notify the person in writing with reasons within seven days. He can apply to the court having insolvency jurisdiction by summons within 21 days of receiving the notice for a review. An appeal lies to the Court of Appeal, whose decision is final (section 709).
Questions and answers
What qualifications does an insolvency practitioner need?
A degree in law, accountancy or another relevant discipline, at least five years’ post-qualification experience in insolvency, membership of BRIPAN or another recognised body, and the Commission’s authorisation (section 705).
What roles need an insolvency practitioner?
Liquidator, provisional liquidator, official receiver, administrator, administrative receiver, receiver and manager, and nominee or supervisor of a voluntary arrangement (section 704).
Can a refusal of authorisation be challenged?
Yes. The person can apply to the court within 21 days of the Commission’s written notice, and appeal to the Court of Appeal (section 709).
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