Introduction

1.1

The principal legislation for companies winding-up is contained in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) and Companies (Winding-up) Rules (Cap. 32H).

1.2 The main objectives of the companies winding-up are:
(a)

to ensure that all the company's affairs have been dealt with properly;

(b) to have the company dissolved.

1.3 Modes of winding-up include :
(a) voluntary winding-up which consists of :
(i) members' (shareholders') voluntary winding-up; and
(ii) creditors' voluntary winding-up;
(b)

compulsory winding-up by the High Court of the Hong Kong Special Administrative Region (“the court”).


1.4

The Official Receiver's Office mainly administers compulsory winding-up cases. For voluntary winding-up cases, the Official Receiver's Office is only responsible for keeping the unclaimed and undistributed money pursuant to section 285 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) and  rule 183 of the Companies (Winding-up) Rules (Cap. 32H).

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Winding-up Petition



2.1

A limited company may be wound up by the court in the circumstances set out in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32).  The more common ones are :
(a)
the company is unable to pay a debt of $10,000 or above;
(b)
the court is of the opinion that it is just and equitable that the company should be wound up; or
(c)
the company has by special resolution resolved that the company be wound up by the court.

2.2

A creditor, a shareholder or the company itself can file a winding-up petition against the company.

2.3

A solicitor is normally instructed by the petitioner to prepare and file the winding-up petition.

2.4

Any person (e.g. employee) who is qualified for receiving legal aid under the Legal Aid Ordinance (Cap. 91) and the relevant rules and regulations may apply to the Legal Aid Department for assistance in filing a winding-up petition. [For details, please contact the Legal Aid Department direct.]

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Procedures for Filing Petition



3.1 The procedures for filing a winding-up petition are :
(a)

prepare a petition according to Form 2 or 3 in the Appendix of the Companies (Winding-up) Rules (Cap. 32H) with such variations as circumstances may require;

(b)

deposit with the Official Receiver's Office a sum of $11,250 for the purpose of covering the fees and expenses to be incurred by the Official Receiver;

(c) go to the Registry of the High Court to:
(i)

pay a court fee of $1,045,

(ii) obtain a date for the hearing of the petition, and
(iii) file the petition.
(d)

submit a copy of all documents filed in the High Court in connection with the petition to the Official Receiver within 24 hours after such documents are filed with the court;

(e)

advertise the petition seven clear days before the hearing date of the petition once in the Gazette and once at least in two Hong Kong daily newspapers (one Chinese and one English);

(f)

deliver a sealed copy of the petition to the registered office of the company or, in case there is no registered office of the company, the principal or last known principal place of business of the company; and

(g)

file an affidavit verifying the petition within four days after the petition is filed with the court using Form 7 or 8 in the Appendix of the Companies (Winding-up) Rules (Cap. 32H).

 
[Note
If a petitioner wishes to withdraw a petition already filed in the court, he has to apply to the court for approval. He is also required to pay the costs of the Official Receiver's Office. ]

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Effects of Compulsory Winding-Up



4.1

Generally, the winding-up of the company by the court shall be deemed to commence at the time of the filing of the petition for winding-up.

4.2 After the commencement of winding-up :
(a) any disposition of the property of the company, including any transfer of shares or alteration in the status of the shareholders of the company, unless the court orders otherwise, is void; and
(b) the company or any creditor or shareholder may apply to the court to stay or restrain any pending action or proceeding against the company.
 

[Note
If the petitioner believes that the assets of the company are in jeopardy, he may apply to the court, after the filing of the winding-up petition, for the appointment of a provisional liquidator to safeguard the assets of the company prior to the hearing of the petition. This will require a further sum of $3,500 to be deposited with the Official Receiver's Office by the petitioner. Additional sums may be required to be deposited when necessary.

Where a person other than the Official Receiver is appointed as the provisional liquidator prior to the making of the winding-up order, the person will continue to act as the provisional liquidator on the winding-up order being made.]


4.3 After the provisional liquidator is appointed or the winding-up order is made against the company :
(a)

no action or proceeding shall be continued or commenced against the company except with the approval of the court;

(b)

the Official Receiver will become the provisional liquidator of the company unless a provisional liquidator has already been appointed prior to the making of the winding-up order (see Note in 4.2 above);

(c)

if the property of the company is not likely to exceed in value $200,000, the Official Receiver, when acting as provisional liquidator, may appoint another person as provisional liquidator in his place; and

(d)

the provisional liquidator will take over control of the company including its assets and accounting records and investigate the company's affairs.


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First Meetings of Creditors and Contributories



5.1

The provisional liquidator appointed after the making of the winding-up order will convene and chair the first meetings of creditors and contributories within three months from the date of the winding-up order for the purpose of appointing a liquidator and a committee of inspection.

5.2

Generally, for the first meeting of creditors, only creditors whose Proof of Debt Forms have been admitted for voting purpose by the chairman of the meeting have the right to vote.

5.3

Generally, for the first meeting of contributories, only contributories whose names appear in the latest Annual Returns of the company filed with the Companies Registry as members have the right to vote.

 

[Note
Creditors and contributories may decide, in suitable cases, whether an application should be made to the court, under section 209A of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32), for an order for the winding-up of the company to be conducted as if it were a creditors' voluntary winding-up.]


5.4

The chairman of the meetings will report the results of the meetings to the court and apply for an order of appointment of liquidator and members of the committee of inspection, if any.

5.5

Where the provisional liquidator is of the opinion that the property of the company is not likely to exceed in value $200,000, he may apply to the court for an order that the company be wound up in a summary manner, i.e. there will be no first meetings of creditors and contributories and the provisional liquidator shall be the liquidator without a committee of inspection with such other modifications as may be prescribed with a view to saving expense and simplifying procedure.

5.6

If any creditor or contributory requests for the summoning of the first meetings of creditors and contributories, the provisional liquidator should give due consideration to such request even though he is of the opinion that the property of the company is not likely to exceed in value $200,000.

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Duties of Directors of a Wound-up Company



6.1

On the appointment of a provisional liquidator or the making of the winding-up order, the powers of the directors of the company will cease. The directors must then :

 
(a)

deliver to the provisional liquidator or liquidator the company's assets, books and papers and seal;

(b)

attend the office of the provisional liquidator or liquidator for interview to provide information of the company's assets and dealings;

(c)

submit a sworn statement of affairs of the company (similar to a balance sheet) (or a supplementary affidavit, if required by the provisional liquidator or liquidator) within 28 days from the date of the appointment of the provisional liquidator or the date of the winding-up order;

(d)

attend meetings of creditors and contributories when notified by the provisional liquidators or liquidators;

(e)

continue to co-operate with the provisional liquidator or liquidator until the liquidation is concluded; and

(f)

notify the provisional liquidator or liquidator of any change in address.


6.2

Directors who fail to perform their duties such as failure to keep and preserve company’s accounting records that comply with section 373(2) and (3) of the Companies Ordinance (Cap. 622), failure to prepare and submit the statement of affairs or a supplementary affidavit, etc. may be prosecuted (see 10.1 below) and disqualified from acting as directors for a certain period of time (see 11.1 and 11.2 below).

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