A private limited company may be wound up by the HK High court in the circumstances set out in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32).
Common grounds for winding up of company:
(a) the company is unable to pay a debt of HK$10,000 or above; or
For winding up against the company on the ground of unable to pay debt, the solicitors acting for the creditor will have to issue statutory demand against the company. If the company is unable pay the debts claimed in full or reach any settlement with the creditor in 21 days, the creditor can initiate winding up proceedings against the company.
(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.
Petitioner / Applicant who can file a winding up petition against the company with the HK High Court :
(i) A creditor, eg employee; or
(ii) A shareholder; or
(iii) The company itself.
A solicitor is normally instructed by the petitioner to prepare and file the winding-up petition.
Before the solicitor is able to take on the case to initiate the winding up proceedings, the solicitor would have to conduct conflicts search if there is any conflict of interest in taking on the case.
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.
Effects of Compulsory Winding Up
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.
After the commencement of winding-up proceedings :
(a) any disposition of the property of the company, including any shares transfer or alteration in the status of the shareholders of the company, is void unless the court orders otherwise; 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.
For legal advice or services on civil claim or winding up proceedings or debt recovery, please contact CHOW & CHEUNG, Hong Kong Solicitors & Notary Public
Tel: +852 2856 3799 Email: firstname.lastname@example.org
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