Nicolas VanderchmittErik Leyssens Of counselHong Kong
Revamp of Hong Kong’s winding up and
insolvency regime: key changes to keep in mind.
Hong Kong has introduced a sweeping revamp of its winding up and insolvency regime with the amendments to the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) that came into force on 13 February 2017. The amendments represent an important modernization of Hong Kong’s existing rules by increasing protection of creditors and further streamlining the winding up process. The key provisions of such amendments are summarised in this note.
By way of background, a Hong Kong company can be wound up through a voluntary winding up or a compulsory winding up. A voluntary winding up can take the form of a members’ voluntary winding up and a creditors’ voluntary winding up. The principal difference between the two is that for a members’ voluntary winding up the company must be solvent while in the second one it is not. A compulsory winding up is commenced by a member petitioning the Court to wind up a company on ‘just and equitable’ grounds.
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