The principal legislation relating to the winding-up of a company is set out in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) and the Companies (Winding Up) Rules (Cap. 32H).

The main objectives of the company's winding up are:

to ensure that all matters of the Company have been properly handled;

Dissolution of the company.

Types of Winding-up include:

Voluntary liquidation includes:

1. Voluntary liquidation of the members (shareholders) of the company; and

2. Voluntary liquidation of creditors;

3. Compulsory winding-up by the High Court of the Hong Kong Special Administrative Region.

Winding up petition

The court may wind up a limited company in the circumstances set out in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32). The more common scenarios are:

The Company is unable to pay its debts of $10,000 or more;

The court held that the winding up of the company was just and equitable;

By special resolution, the Company has decided that the Company shall be winded up by the Court.

Any creditor, shareholder or the company itself may file a petition to wind the company.

Petitioners usually engage counsel to prepare and file the procedures for a winding-up petition.

Persons who meet the eligibility for assistance under the relevant rules and regulations of the Legal Aid Ordinance (Cap. 91) (e.g. employees) may apply to the Legal Aid Department for assistance in order to file a winding-up petition.

Procedures for submitting petitions

The procedure for filing a winding-up petition is:

Prepare a petition in accordance with the format of Form 2 or 3 in the Appendix to the Companies (Winding-Up) Rules (Cap. 32H), subject to changes as required;

deposit an amount of $11,250 to the Insolvency Administration to cover the costs and expenses incurred by the Director of Insolvency;

Go to the High Court Registry:

Payment of $1,045 in court fees;

The date on which the petition for hearing was obtained; and

Submit a petition.

All documents submitted to the High Court in connection with a petition shall be submitted to the Director of Insolvency Within 24 hours of the submission of such documents to the Court;

The notice of petition should be published in the Gazette once every 7 days prior to the hearing of the petition and at least once in two Hong Kong daily newspapers (one Chinese newspaper and one English newspaper);

(f) deliver a stamped copy of the petition to the registered office of the company or, if the company does not have a registered office, to the principal or finally known principal place of business of the company; and

(g) Submit an affidavit within four days of filing the petition with the court to verify the petition. [See Table 7 or 8 in the Appendix to the Companies (Winding-Up) Rules (Cap. 32H).]

Impact of forced liquidation

Generally, a winding-up of a company made by a court must commence as if it were filed at the time of the winding-up petition.

After the winding up begins :

Any disposition of title to the company's property (including any transfer of shares or any change in the status of shareholders of the company) shall be null and void unless otherwise ordered by a court; and

The Company or any creditor or shareholder may apply to the court to set aside or injunct pending proceedings or proceedings against the Company.