by: Dr June Lian, Desiree H.
What is liquidation? Is it optional or voluntary and when should I be concerned about it?
Liquidation is a common procedure that may be followed when a limited company disbands.
Even without financial difficulties, liquidation may be voluntarily adopted by its shareholders by passing a special resolution that the company be wound up during a general meeting, in that case no involvement of the Court is necessary and mainly accountants rather than lawyers will lead the process.
In contrast, mandatory liquidation becomes necessary when a company is faced with heavy debts, and requires the presence of both accountants and lawyersin order to execute a court order on petition of a creditor, a shareholder or the company itself. The order can be granted on three common grounds:
- the company is unable to pay a debt of HKD10,000 or above;
- the court is of the opinion that it is just and equitable that the company should be wound up; or
- the company has by special resolution resolved that the company be wound up by the court.
What is the advantage of liquidation over other closing-down options?How can I find an expert on liquidation?
According to the reports by the Official Receiver’s Office and various multi-disciplinary studies, liquidation is one of the most effective methods to:
- ensure that all the company’s affair have been dealt with properly; and
- have the company dissolved without delay.
LHC has a team of professional solicitors that have decades of legal experience providing quality, swift and affordable liquidation services. Winding-up of a company can be a confusing and sometimes stressful process, but we will guide you through step-by-step and will tell you exactly what you will need to help you move on with ease.
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