Bankruptcy & Company Winding Up
Similar to many other developed countries and jurisdictions, economy in Hong Kong often has its ups and downs. When things turn out not as good as expected, insolvency situations may end up in bankruptcy for individuals and winding up for corporations.
Bankruptcy under Bankruptcy Ordinance, Chapter 6 of the Laws of Hong Kong
There are 2 types of bankruptcy :-
Debtor's Bankruptcy -
where individual debtor having incurred debts over HK$10,000 and being unable to pay such debts, pro-actively files a debtor's bankruptcy Petition with The High Court of Hong Kong
As the paper work is often complicated, debtors' petitions are usually filed through a solicitors firm.
The whole process from debtor's petition up to the date of Bankruptcy Order takes about several months depending on the complexity of the cases.
Undischarged bankrupt debtors are subject to many restrictions, and will not be allowed to borrow from banks/financial institutions, and further they could not take up post as directors of limited companies.
The Bankruptcy Order will usually be discharged after 4 years.
Creditor's Bankruptcy -
where a creditor having served a statutory demand notice against a debtor, files a creditor's bankruptcy petition against the debtor who fails to satisfy the statutory demand notice.
If the creditor could successfully prove that the debt is still owing and unpaid, The High Court will grant a bankruptcy order unless the debtor can satisfy the Court why the bankruptcy order should not be pronounced against the debtor.
The Bankruptcy Order will be discharged after 4 years.
Winding Up under the Companies (winding Up & Miscellaneous Provisions) Ordinance, Chatper 32 of the Laws of Hong Kong
A limited company, which is unable to pay its debts when fall due, may be wound up by creditor(s) under compulsory winding up procedures.
On the other hand, where a limited company is solvent (i. e. able to pay up its debts from its assets) may still voluntarily wind up the company if all the members and directors for some reasons do not want to continue to run the company any more.
Raymond T. L. Tse & Co. Solicitors
Unit A, 10/F, World Trust Tower,
50 Stanley Street, Central, HONG KONG
Tel: (852) 2521 2711
Office Opening Hours:
Monday-Friday 9:30AM-1:00PM, 2:00PM-5:30PM
Closed on Sundays & Public Holidays