Company Law and Employment Law

Company Law and Employment Law
Running Head: Company Law and Employment Law
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Student’s Name
Module Name : Business Law
Module Number : 4002

Company Law and Employment Law
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Contents
Part A...............................................................................................................................................2
(a) Legal Precedent of Salomon v A Salomon & Co Ltd 2
(b) Business Structures 3
Part B...............................................................................................................................................6
Bibliography....................................................................................................................................9
Case Laws 9
Books/Journals 9
Other Sources 9

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Part A
(a) Legal Precedent of Salomon v A Salomon & Co Ltd
In the area of corporation law, Salomon v A Salomon & Co Ltd [1896] UKHL 1, [1897] AC 221,
is one of the significant cases. The same is significant as it has provided an important
characteristic of corporations and set a legal precedent. It is known to everyone that a company is
an artificial person and therefore cannot do acts by itself. Members ands directors are the people
who take the decision on behalf of a company. In the subjective case, a person named Salomon
has transferred his business and developed a company. Later on, the same has provided a loan to
the company and received the debentures of the same. Here this is to mention that the whole
shareholding was with Salomon and his other family members2. At the time of liquidation of the
company, Salomon, being a secured creditor claimed his shares in the assets over and above rest
of the creditors. In the final decision of the case, it has been given that claim of Salomon is valid
and his sole ownership will not make any impact on his right as a creditor. The legal precedent of
this case is the separate legal status of the company. According to this precedent, an artificial veil
exists between the company and its owners/members. Therefore, to say that in this case it has
been established that a company is a separate an independent entity from any of the person that is
related to the company3.
1 Salomon v A Salomon & Co Ltd [1896] UKHL 1, [1897] AC 22
2 Jose Maria Lezcano, Piercing the Corporate Veil in Latin American Jurisprudence: A comparison with the Anglo-
American method (Routledge 2015)
3 Andy Gibson and Douglas Fraser, Business Law 2014 (Pearson Higher Education AU 2013)

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