Appointment of a provisional liquidator in Hong Kong

What Is a Provisional Liquidator in Hong Kong?

A provisional liquidator is an interim appointee made by the court in a compulsory winding up. The appointment follows the filing of a winding-up petition but precedes a final winding-up order. It is governed by the Companies Ordinance (Cap. 622). The court appoints one to preserve the company's assets and maintain the status quo until the winding-up hearing. This happens where there is a serious risk that assets will be dissipated or removed from Hong Kong before the petition is heard.

Provisional Liquidation HK

Provisional liquidation is a court-ordered measure bridging the period between a winding-up petition and a winding-up order. The court will consider an application where the petitioner shows a real risk to the company's assets or the company's directors have ceased to act. The application is made by summons in the winding-up proceedings.

Interim Liquidator Hong Kong

The provisional liquidator is an interim office-holder. Their role is limited to preserving assets, taking control of the company's property, and reporting to the court. They do not have the full powers of a liquidator appointed after a winding-up order. They cannot investigate the company's affairs or pursue claims against directors.

Court Appointed Provisional Liquidator

The court appoints the provisional liquidator, usually on the application of the petitioner, the company, a creditor, or a contributory. An interim order makes the appointment. The court may also appoint the Official Receiver as provisional liquidator. The appointment is gazetted and notified to the Companies Registry.

Provisional Liquidator Role

The provisional liquidator safeguards the company's assets and liabilities pending the winding-up hearing. They take custody of the company's property, books and records. They may carry on the company's business only so far as necessary to preserve its value. They report to the court and to the creditors on the company's financial position. Once a winding-up order is made, the provisional liquidator is usually replaced by a permanent liquidator.