On 3 June 2016, the Government gazetted the Companies (Winding Up and Miscellaneous Provisions) Amendment Ordinance 2016 (the ‘Amendment Ordinance’).
The Amendment Ordinance seeks to modernise and improve Hong Kong's winding up regime.
One of main objectives of the Amendment Ordinance is to enhance protection of creditors. The court will have the power to set aside transactions at an undervalue entered into by a company within five years before the commencement of its winding up. 'Undervalue' means receiving no consideration, or for a consideration in money or money’s worth, which is significantly less than the value of the subject of the transaction.
Another objective is to streamline and simplify the winding up process while ensuring that it is effective. To this end, the proceedings of the committee of inspection have been simplified and a few court-free procedures have been introduced. The costs and time for administering winding up cases can be reduced as a result.
Last but not least, in order to enhance the integrity of winding up process, aggrieved parties can apply to the court for an order to enforce liabilities resulted from the liquidator's misfeasance or breach of duty even though the liquidator has obtained a court order releasing him as a liquidator after completion of the winding-up case.
Promotions and briefings on the Amendment Ordinance will be arranged by The Official Receiver's Office in due course.