Liabilities and Rights of Partners

Running Head: BUSINESS AND CORPORATION LAW
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BUSINESS LAW
ASSIGNMENT
Date : 05-05-2019

Problem Solving Question 1
Contents
Question 1........................................................................................................................................2
Issue 2
Law 2
Application 3
Conclusion 4
Question 2........................................................................................................................................4
Issue 4
Law 5
Application 6
Conclusion 7
References........................................................................................................................................8

Problem Solving Question 2
Question 1
Issue
The issue of the case is to check and determine -
(a) Nu Shampoo Pty Ltd has any right to sue David as he breached restraint of trade clause.
(b) Standard Bank has any right to sue David to recover $100000
Law
A corporation is an artificial person and cannot perform the actions as a natural person.
Some people are associated with a corporation that includes promotes and board of directors.
Promoters are people who bring a company into existence. Directors and officers on the different
side are people who manage and control the affairs of the company. Nevertheless, the same has a
separate legal identity from such people. It was held in the case of Salomon v A Salomon & Co
Ltd [1896] UKHL 1, [1897] AC 22 that a corporation has a separate identity in the eyes of law
and therefore they cannot be considered as the same person even in those cases where the
director has a substantial interest in the company. In this case, the person named Salomon
incorporated a company and transferred his assets of his current business to a new company. In
return, to these assets, the company paid him with debentures of the company. Here this is to
mention that the whole ownership of the company was in the hand of Salomon and his family
members (Trans-lex.org, 2019). When the company went into liquidation then Salomon asked
his claim from the company above before other creditors. In the decision of this case, the court
held that regardless of the ownership of the company, Salomon was a different person from his