Company Law: Liability of a Company and its Employees

Running head: COMPANY LAW
Company Law
Name of the Student
Name of the University
Author Note

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COMPANY LAW
Table of Contents
Introduction:....................................................................................................................................2
Discussion:.......................................................................................................................................2
Primary Liability-........................................................................................................................2
Secondary liability:......................................................................................................................3
Personal liability: Negligence:.....................................................................................................5
Contributory negligence:.............................................................................................................5
Conclusion:......................................................................................................................................6
Bibliography:...................................................................................................................................7

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COMPANY LAW
Introduction:
It is a well-known principle of law that company is a separate entity and the same
principle was established in the case of Salomon v Salomon and Co. Ltd. However, in numerous
circumstances the courts have disregarded the separate legal entity to identify the person who is
personally liable for any act. Thus by the application of the principle as established in the
Salomon’s case it can be said that the company Squelch Ltd. will be held liable for the injuries
sustained by Leonard due to the principle of Separate Legal Entity.
Discussion:
Primary Liability-
A Company can be held personally liable when it has committed the wrongful acts itself
by its controllers who have a directing mind1. It can be mentioned that the criminal law
generally assesses the mental state of the person who commits the wrongful act to be an
embodiment of the company’s mental state. As held in the case S&Y Investments v Commercial
Union,2 a company can be held guilty of manslaughter where it’s directing mind, which can be a
director or senior manager, kills a person with a person during the course of employment with
guilty intent. Further, it can be stated that the Company will be liable for the wrongful acts of the
person who commits the crime as the acts of the company. In such a case, the mens rea of the
guilty person will be attributed to the company. Thus, in this case it is evident that Jenifer was
acting as the director of the company Squelch Ltd. Thus, in this case it can be said that the
company Squelch Ltd. will not incur personal liability as the director the company Jenifer did not
1 Al‐Hadi, Ahmed, et al. "Corporate social responsibility performance, financial distress and firm life cycle:
evidence from Australia." Accounting & Finance (2017).
2 No. AP 3 of 1986