Liquidation (winding up) is an expression to identify the process whereby the assets of a limited company are realised and the company ultimately dissolved.
There are two types of liquidation;
- voluntary liquidation
- compulsory liquidation
Voluntary liquidations are divided into two further categories; members' voluntary liquidation and creditors' voluntary liquidation
Members' voluntary liquidation
A company can be terminated by “Members’ voluntary liquidation” only if all the debts of the company are paid in full by the company or shareholders. The director of the company must issue a certificate of solvency in prior to the application of “Members’ voluntary liquidation”.
Creditors' voluntary liquidation
A creditors' voluntary liquidation is a liquidation in which the shareholders and creditors of an insolvent company appoint a liquidator without any direct interference or control from either the court or any government department.
A winding-up by the court is also known as a "compulsory" liquidation. It is initiated by an application to the court known as a "petition" presented by an interested party who is normally a creditor of the company. This type of liquidation is supervised by the court and the Official Receiver's office (a government department).
Our affiliate partners hold the Specialist Designation in Insolvency awarded by the Hong Kong Institute of Certified Public Accountants (HKICPA), and are also a member of the Restructuring and Insolvency Faculty of the HKICPA. Their extensive experience included engagement in compulsory and voluntary liquidations, bankruptcy and individual voluntary arrangements, financial reviews and investigations. They managed more than 300 insolvency cases for corporations and individuals.