logo

Salomon's Case and its Legacy

   

Added on  2020-05-16

9 Pages2103 Words127 Views
 | 
 | 
 | 
Running head: CORPORATION LAWCorporation LawName of the StudentName of the UniversityAuthor Note
Salomon's Case and its Legacy_1

1CORPORATION LAWTable of ContentsSalomon v A. Salomon & Co Ltd [1897] AC 22............................................................................2Impact of Salomon principle on Company law...............................................................................3Lifting the Corporate Veil...............................................................................................................5Future of company law....................................................................................................................6Whether change is necessary in the present law..............................................................................7Reference list...................................................................................................................................8
Salomon's Case and its Legacy_2

2CORPORATION LAWCompanies are said to be an artificial legal personThe incorporation of a company as artificial legal person is recognized as a legal personby law that exists independently with rights and liabilities. This implies that a company is treatedas a separate person from the participants of the company. In the legal context, there are twotypes of persons, namely, artificial and natural (Jackson 2015). The former refers to humanbeings which law recognized as having rights and duties whereas the latter is recognized ashuman beings. Corporations are recognized as artificial person as it possess the right to purchaseand sell any property or the right to sue or be sued against the third party. The separate legal entity of the company as an artificial person has resulted in the featureof perpetual succession. A company has perpetual succession which implies that it cannotaffected by disability, insolvency, death or disagreement of shareholder. The principle that acompany is an artificial person and has a separate legal entity, which is perceived as the steadiestrule of corporate jurisprudence. This principle has been established in the case of Salomon vSalomon that only laid foundation of the English Company Law but of the commercial lawregime universally. Salomon v A. Salomon & Co Ltd [1897] AC 22Facts Salomon initially operated as sole proprietorship business but transferred his boot makingbusiness to a company (Salomon Ltd) that included himself and his family as the members of thecompany. Salomon received the price for such transfer as shares and debentures with a securityagainst debt on the company assets. Later, when the company failed and liquidated, the right ofSalomon to claim for recovering securities against the debentures became a priority for the
Salomon's Case and its Legacy_3

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents