When winding up an incorporated practice, particular care is needed in relation to the sequence of events. Incorporated practices need to have, at all times, at least one human individual appointed as a manager who is (a) qualified to be a manager and (b) able to act as manager.
Individuals can be disqualified from being a manager due to a failure to renew their practising certificate – or by the suspension, withdrawal or restriction of their practising certificate. Suspension can be triggered automatically on the occurrence of certain events, such as sequestration of the individual’s estate; or the individual signing a trust deed for creditors. (This list is not exhaustive).
Sometimes managers may have granted personal guarantees in respect of certain liabilities of the business – if those guarantees are called up and the liabilities not met then the creditor may seek sequestration of all the managers of the incorporated practice at the same time, leaving no-one qualified and able to act as manager
Where the practice unit is an incorporated practice, if there is no individual qualified and able to act as manager because the individual’s practising certificate is withdrawn or not renewed then there may be no-one who can legally operate the practice’s client account.
This means when winding up an incorporated practice, at least one individual appointed as manager must have a valid practising certificate in force until the client account is completely dealt with.