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Business & Corporation Law

   

Added on  2020-03-16

12 Pages2696 Words32 Views
Running head: BUSINESS AND CORPORATION LAWBusiness and Corporation LawName of the StudentName of the UniversityAuthor Note

2BUSINESS AND CORPORATION LAWTable of ContentsIntroduction......................................................................................................................................3Fact of the case................................................................................................................................3The issue..........................................................................................................................................4Applied rules....................................................................................................................................4Application of corporations Act......................................................................................................6Legal consequences.........................................................................................................................6Piercing of the corporate veil...........................................................................................................8Conclusion.......................................................................................................................................9Reference.......................................................................................................................................11

3BUSINESS AND CORPORATION LAWIntroduction The separate legal personality is one of the basic terms of tenet where Company Law hasbeen premised it helps the fundamental laws to establishes every legislation where a companyowns the existence and functions. According to the study the rule of corporate jurisprudence inthe case of Salomon V A Salomon And Co Ltd [1897] the court has establishes the principlesof separate legal personality which has covered the universal commercial law of regime. Thedoctrine of separate legal entity has been analyzed in this case which has formed according to thecompany law and corporate theory. The corporate theory has made several certain principles which are difficult to define dueto the unsuitable for strict and permanent delineation for the formation of this law (Lim, 2014).Fact of the case The fact of the case is Solomon who transferred his business of boat making where heruns the business as a sole proprietorship with the company of Solomon Limited which alsoincorporated property to the members who are himself along with his family. Salomon hastransferred the business through the way of shares debentures which included floating chargeswhich define the security against debts for the Assets of the company. However after sometimethe business has been failed to corporate it and went into liquidation. Therefore Salomon’s rightsfor the recovery of floating charges has been claimed against the debentures which are unsecuredcreditors but it there was no recovered of such depths from the liquidation process (Waqas &Rehman, 2016).

4BUSINESS AND CORPORATION LAWLater in the elevation of unjust exclusion the liquidator who has appointed on the behalfof unsecured creditors make the charges of allegation where Solomon was found level for thedates for being the principal in this liquidation process. In which case it was also found theliquidator has overlooked the separate personality of the company Solomon Limited whereSolomon itself the member of the company therefore it makes Solomon personally liable forsuch debt of the company and for being a sole trader of the business it also make the burden forhim (Watson, 2015).The issue As per the case fact the issue has been arrival regarding the claims of the unsecuredcreditors in the liquidation process of the company Solomon Limited where Solomon itself holdsthe major part of shares and charged for the liability of the company’s Debt. Therefore theseparate legal in identity of the company weather make liable for the debts where the shareholderholds the rights of sole trader and above the capital contribution the unlimited personal liabilityof being a member towards the company also holds any duties for payment of the debts of thecompany (Waqas & Rehman, 2016).Applied rules The court of appeals has declared in the case of Solomon vs. Solomon and Co Limitedthat as Solomon was incorporated in the company contrary according to the true intent as per theCompanies Act 1862 and the letter it was found to conduct it with the business as an agent ofSolomon therefore he should be responsible for the Dept in curd for running the business whichis also recognize as agency. The house of Lord according to the appeal over the ruling andanonymously held of the case proceeding where the company was found Incorporated and

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