Winding-up of a Company in Hong Kong
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Company Liquidation

  • Due to COVID-19 pandemic, many companies are experiencing operational difficulties and have even been shut down. If a company is registered as a limited company and is highly indebted, creditors have the right to file a petition for winding up in order to recover the compensation they are entitled to, and even shareholders, as well as the company itself, can petition to wind up the company.

What is a company liquidation?

Liquidation of a company refers to the dissolution of a company through legal proceedings and it can be mainly classified into two categories: compulsory and voluntary liquidation.

Liquidation petition

The court may wind up a limited company according to Cap 32 – Companies (Winding Up and Miscellaneous Provisions) Ordinance 32012 ss. 912 & 920).

Common scenarios:

Our services on dissolution of a company:

If a private company is unable to pay all its debts, it can be wound up as a creditors’ voluntary winding up. As the liability of the shareholders of a private company is limited to the unpaid principal amount of shares, they are not liable for the unpaid debts of the company as long as they have paid the outstanding amount of share capital.

7-step liquidation process

Step 1

Issue letters to demand relevant companies to pay the debt

Step 2

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Step3

Court Hearing, Order for Liquidation

Step 4

Meeting of all creditors and other relevant parties

Step 5

Appointing liquidators, disposing of company assets and distributing money to creditors

Step 6

Discharge of liquidator

Step 7

Dissolving the Company.

One-stop Consulting Services on Company Liquidation and bankruptcy

Frequently Asked Questions (FAQs)

Frequently Asked Questions on Company Liquidation

  • The company’s book of account must be complete and accurate
  • The decision regarding voluntary liquidation is approved by the majority of shareholders
  • The company is able to pay its debts
  • A liquidator must be appointed to oversee and manage the entire liquidation process
  • The company’s book of account must be complete and accurate
  • The decision regarding voluntary liquidation is approved by the majority of shareholders
  • The company is able to pay its debts
  • A liquidator must be appointed to oversee and manage the entire liquidation process
  • All shareholders agree to the decision
  • The company has never commenced business or operations, or has ceased business or operations for at least 3 months prior to the application for deregistration
  • No outstanding debts, including government license fees and taxes
  • The company is not a party to any legal proceedings
  • Corporate assets do not include real estate located in Hong Kong.
  • If the company is a holding company, the assets of its subsidiaries do not include any immovable property situated in Hong Kong.
  • A Written Notice of No Objection must be obtained from the Commissioner of Inland Revenue.

A compulsory liquidation is enforced by the court. Either the company itself, the company’s creditors, the Registrar of Companies or the Official Receiver can initiate a request for liquidation. When a liquidation order is made, the court will appoint a liquidator and the Official Receiver may also act as provisional liquidator and the whole process involves numerous meetings of directors, shareholders and creditors.

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