The difference between liquidation and bankruptcy of Hong Kong companies

Company liquidation, as a legal procedure, refers to a series of processes in which the company stops operating, sells all assets at a low price in a short time, pays off the outstanding money before, and then declares the company dissolved according to legal procedures. The bankruptcy of a company refers to the state that the company can't continue to operate because it can't pay off its due debts, and the court announces to stop its business and clean up its debts. Liquidation is a commercial term, which means the liquidation of the company's related assets. Bankruptcy is a legal term, which means that a company can apply for bankruptcy if it meets the conditions stipulated by law, and the bankruptcy of the company will be handled in accordance with relevant procedures. After the bankruptcy proceedings, if the company has surplus assets, it will pay them off according to law. No matter after liquidation or bankruptcy, as long as the company has the corresponding property and property rights, the company has the ability to bear the relevant debts. According to the provisions of Article 183 of the Company Law of People's Republic of China (PRC), if the company is dissolved due to the provisions of Items (1), (2), (4) and (5) of Article 180 of this Law, a liquidation group shall be established within 15 days from the date when the reasons for dissolution appear to start liquidation. The liquidation group of a limited liability company is composed of shareholders, and the liquidation group of a joint stock limited company is composed of directors or personnel determined by the shareholders' meeting. If a liquidation group is not established for liquidation within the time limit, the creditor may apply to the people's court to appoint relevant personnel to form a liquidation group for liquidation. The people's court shall accept the application and promptly organize a liquidation group to carry out liquidation. Article 187 If the liquidation group finds that the company's assets are insufficient to pay off debts after clearing up the company's assets and compiling the balance sheet and list of assets, it shall apply to the people's court for bankruptcy according to law. After the company is declared bankrupt by the people's court, the liquidation group shall hand over the liquidation affairs to the people's court.