When a company begins to struggle financially, directors often turn to online advice or seek professional help for liquidation or rescue options. However, not all “insolvency experts” advertising their services are authorised to act legally. The recent case of Davis Acquisitions Ltd, which was shut down for unlicensed insolvency activities, serves as a strong warning for directors across the UK.
This case highlights a critical point that every company director should understand: only licensed insolvency practitioners (IPs) are legally allowed to carry out insolvency work in the United Kingdom. Using an unlicensed adviser is not only risky, but it can also lead to serious consequences for both the director and the company.
At Simple Liquidation, we regularly hear from directors who have been misled by unregulated firms promising “cheap” or “quick” liquidations. These companies often act as intermediaries or brokers, taking fees and passing cases on to licensed practitioners — or worse, offering illegal insolvency services without any authorisation at all. The Davis Acquisitions case shows why it is essential to work only with a licensed, reputable firm.
The Davis Acquisitions Ltd case: a cautionary tale
In early 2025, the Insolvency Service obtained a winding-up order against Davis Acquisitions Ltd, which had been offering insolvency advice and services to struggling companies despite not being authorised to do so. Investigators found that the company was misleading directors by presenting itself as a legitimate insolvency firm, taking fees for services it was not legally permitted to perform.
The Insolvency Service described Davis Acquisitions as an “unlicensed operator” that exploited distressed directors by charging significant sums for advice and documentation which held no legal weight. As a result, the High Court ordered the company to be wound up in the public interest.
This case is just one of several enforcement actions taken in recent years to protect directors and creditors from unregulated advisers. It demonstrates the UK government’s commitment to clamping down on firms that prey on vulnerable businesses during difficult times.
What the law says: who can legally handle insolvency work
Under the Insolvency Act 1986, only individuals who hold a current insolvency licence issued by a recognised professional body (RPB) are authorised to act as insolvency practitioners.
Recognised bodies include:
- The Institute of Chartered Accountants in England and Wales (ICAEW)
- The Insolvency Practitioners Association (IPA)
- The Institute of Chartered Accountants of Scotland (ICAS)
- The Association of Chartered Certified Accountants (ACCA)
- The Chartered Accountants Ireland (CAI)
To be licensed, an insolvency practitioner must demonstrate:
- Relevant qualifications and professional competence.
- Compliance with strict ethical and regulatory standards.
- Appropriate professional indemnity insurance.
- Ongoing adherence to annual monitoring and continuing professional development.
Only these licensed individuals can be formally appointed to act in statutory insolvency procedures such as:
- Creditors’ Voluntary Liquidation (CVL)
- Members’ Voluntary Liquidation (MVL)
- Compulsory Liquidation
- Company Voluntary Arrangement (CVA)
- Administration
- Bankruptcy proceedings
Anyone offering to carry out these services without a licence is breaking the law.
Why unlicensed insolvency advice is dangerous
When a business is in financial distress, directors are under pressure and often desperate for help. Unfortunately, unregulated firms exploit that urgency by offering fast, low-cost solutions — but these are rarely what they seem.
Common risks include:
- Incorrect or illegal advice
Unlicensed operators may suggest actions that breach directors’ legal duties or insolvency law, putting the director personally at risk.
- Loss of money
Many directors pay upfront fees to unlicensed firms only to discover that no formal insolvency process was initiated and creditors are still pursuing them.
- Delays and damage
By the time the problem is identified, valuable weeks or months may have passed, worsening the company’s position and reducing the chances of a rescue or orderly liquidation.
- Director liability
If directors act on incorrect advice and continue trading while insolvent, they could face wrongful trading claims, fines, or disqualification.
The Insolvency Service regularly warns directors to avoid “rogue advisers” and always check whether the person they are dealing with is licensed to act.
How to check if an insolvency practitioner is licensed
Before appointing anyone to handle a liquidation or restructuring, directors should carry out a simple verification step.
- Ask for the practitioner’s licence number
Every authorised insolvency practitioner has a unique licence number issued by their regulatory body.
- Verify it with an official body
- Check the Insolvency Service’s Insolvency Practitioner Directory online.
- Or visit the IPA or ICAEW websites, which allow you to search by name or firm.
- Check the Insolvency Service’s Insolvency Practitioner Directory online.
- Avoid untraceable firms
If a company refuses to name the licensed insolvency practitioner who will act for you, that is a major red flag.
Remember, brokers or intermediaries who say they will “arrange” liquidation are not licensed to handle your case directly. The appointment must always be made in the name of a licensed individual.
Lessons for directors: how to stay protected
The Davis Acquisitions case serves as an important reminder that directors have a duty to act responsibly when their company is insolvent. This includes ensuring that professional advice is obtained from a legitimate source.
Key lessons include:
- Always verify credentials before paying any fees
A legitimate insolvency practitioner will be transparent about who they are, what licence they hold and which professional body regulates them.
- Beware of generic “insolvency helplines” or “quick liquidation” websites
Many of these are simply marketing intermediaries who sell your details to third parties or give poor-quality advice.
- Do not be pressured into immediate payment
Reputable practitioners will explain the process, provide a written engagement letter and clear pricing before you commit.
- Remember your legal obligations
If your company is insolvent, you must act in the interests of creditors and avoid taking on new debts. Working with an unlicensed adviser could put you in breach of your director duties.
How Simple Liquidation Ensures Full Compliance
At Simple Liquidation, we are proud to be a fully regulated firm of insolvency professionals. Our Insolvency Practitioners, Jamie Playford FABRP MIPA and Alex Dunton MABRP, are licensed to act in the UK by the Institute of Chartered Accountants in England and Wales (ICAEW) and authorised by the Insolvency Practitioners Association (IPA).
We are not intermediaries, brokers or sales agents. We handle every case ourselves from start to finish, ensuring full compliance with UK insolvency legislation.
Our team has over 30 years of combined experience and has helped hundreds of directors close both solvent and insolvent businesses quickly, lawfully and with minimal stress. We understand the importance of affordability and transparency, which is why we clearly explain our costs and provide straightforward, no-obligation advice before you decide to proceed.
By choosing a licensed firm like Simple Liquidation, you can be confident that:
- All work is carried out in line with UK insolvency law.
- Creditors are treated fairly and in accordance with the Insolvency Act.
- Directors are properly protected from personal liability.
- Every stage of the process is handled by qualified professionals.
Final thoughts
The closure of Davis Acquisitions Ltd highlights an unfortunate truth — that when businesses are in distress, some unregulated operators will take advantage of directors seeking help. However, it also reinforces the vital role of professional regulation in maintaining integrity and trust within the insolvency industry.
Directors must remember that only licensed insolvency practitioners can legally handle liquidations, administrations or company voluntary arrangements. Always verify a firm’s credentials before taking advice or paying any fees.
If your company is facing financial challenges and you need clear, professional guidance, Simple Liquidation is here to help. Our licensed Insolvency Practitioners will explain your options, protect your position and guide you through the process from start to finish.
Contact Simple Liquidation today for a confidential, no-obligation consultation and find out the right course of action for you and your business.