The existing provisions on the winding up of companies in Hong Kong will continue to operate after the new Companies Ordinance comes into effect, which is expected to be on 3 March 2014.
The new Companies Ordinance is an overhaul covering many aspects of the existing Companies Ordinance, including the following:
- Constitution and capacity of companies
- Directors and officers
- Share capital and financial assistance
- Shareholder meetings
- Company administration
- Registration of charges
Schemes of arrangement do form part of the re-write (refer to Part 13, Division 2 of the new Companies Ordinance). The amendments are primarily relevant in the context of takeover and privatisation members’ schemes1 . The process for implementation of creditors’ schemes will largely remain the same as provided for in the existing Companies Ordinance.
The new Companies Ordinance, however, does not cover the winding up and insolvency-related regime. Provisions on these aspects will remain in the existing Companies Ordinance, which will be re-titled the Companies (Winding up and Miscellaneous Provisions) Ordinance.
Insolvency practitioners will therefore continue to refer to the existing Companies Ordinance provisions on the following areas:
- Commencement of winding up
- Appointment, powers and duties of liquidators
- Conduct of winding up
- Ranking of creditors’ claims
- Antecedent transactions
Changes to the insolvency regime are on the horizon – the government kicked off a new consultation process with the issue of a consultation document 2 in April 2013. Some of the areas on which reform is being considered are summarised in the table below:
Click here to view the table.
The government expects to introduce an amendment bill to the Legislative Council in 2014/2015.
The possibility of a statutory moratorium to bind creditors while struggling companies seek to implement rescue plans remains under review by the government and is likely to continue to be the subject of consultation in addition to the above key insolvency regime proposals.