Business Law Report: Corporate Veil, Salomon Case, and Contract Law

This report delves into key issues in business law, primarily focusing on the doctrine of corporate personality and the lifting of the corporate veil, as established in the case of Salomon v A Salomon & Co Ltd. It explains the separation between a company and its investors, the implications of this separation, and the mechanisms through which a company can raise funds. The report provides an analysis of the Salomon case, highlighting the court's upholding of the corporate veil and its implications. Furthermore, the report offers legal advice concerning the resignation of an operation manager in the context of a threatened breach of contract, emphasizing the importance of competent parties and valid contracts in such scenarios. The report uses references from books and journals to support its claims, providing a comprehensive understanding of the legal aspects discussed.

BUSINESS LAW

Table of Contents
Table of Contents.............................................................................................................................2
MAIN BODY...................................................................................................................................3
Key issues...................................................................................................................................3
Held.............................................................................................................................................3
Opinion based on way case was established...............................................................................4
Advice on legal position relating to resignation of operation manager following the threat of
breach of contract........................................................................................................................4
REFERENCES................................................................................................................................5

MAIN BODY
Key issues
The major issue in the case was the lifting of the corporate veil that is upholding the
doctrine of corporate personality. This doctrine states that both the company and the investors
are separate from one another. this doctrine was establishes in 1897 under the case of Salomon
vs A Salomon and Co Ltd which was incorporated as a company or legal entity separate from the
of its owners and directors and other investors. This separation is defined as the veil of
incorporation which majorly focuses on the limited liability over the partners within the
company (Kelly and et.al., 2020). The lifting of corporate of veil is managed by the company
itself as the company is a separate legal entity. Thus, the only management of the company is
done by the members or the partners of the company. The major reason for this is that both the
company and the members are separate from one another and this affects the management and
working of company to a great extent.
For the finding of the company with lifting of corporate veil is that the company will
arrange the funds by the members up to the level of investment they have made within the
business. This is particularly because of the reason that member of the company invest in the
company and with help of this fund the company will be able to manage its operations. in
addition to this the company also floats its share for the public and because of this the company
can arrange the finance. Along with this company can have loans and can also issue debenture in
the market in order to manage the finance to run the business.
In case of the liability the partners or the shareholders are having a limited liability only
up to the share of investment which they are having in company. Further the rest of all the
liability is of the company itself. The major reason for this is that the partners or shareholders are
not responsible more than their share which they are having in the company.
Held
Under the case of Salomon v A Salomon & Co Ltd [1896] UKHL 1, [1897] AC 22 the
court upheld the decision of the high court and not on the basis of the case portrayed by William
considered the important and outcome of lifting of corporate veil (Miller, 2016).
Further in this case it was held that Salomon used the CA 1862 as a device to defraud
their creditors. he also acknowledged that the result of valid incorporation and the company

creditor were incapable of accusing Salomon and could only be liable for compensating the
company. Thus, this appeal was rejected by Salomon.
Opinion based on way case was established
From the above analysis it is clear that the company need to include the lifting of the
corporate veil by the company. This is particularly because of the reason that when the company
lifted the corporate veil then this had a lot of impact over the working of the company. In
addition to this there was also a potential impact over the Hunter management of fund. This is
majorly because of the reason that this was a family business operated as estate agency and this
affected the members who are partners and are showing the characteristic of the sole trader.
Thus, if this will be the case then there will be limited liability of the owner and they will not be
able to manage the working and finding of the company in effective manner (Cameron and
Pagnattaro, 2017).
Advice on legal position relating to resignation of operation manager following the threat of
breach of contract
The major advice on the legal position of the company after the resignation of the
operation manager is a threat of breach of contract. The major reason for this is that when a
contract if breached then there are many different types of legal actions which the company
might undertake in order to make the contract work in better and effective manner. Thus, for this
the company major legal position is that both the parties of contract must be competent for the
contract. This is particularly because of the reason that if the party will not be competent then
this will have a great impact over the working of the contract. Another major legal position for
the company is that the either party must not be of unsound mind or the minor. This is
particularly because of the reason that if this will happen then the contract will not be a valid
contract and will not be competent.

REFERENCES
Books and Journals
Cameron, E.A. and Pagnattaro, M.A., 2017. Beyond millennials: engaging generation Z in
business law classes. J. Legal Stud. Educ., 34, p.317.
Kelly, D., and et.al., 2020. Business law. Routledge.
Miller, R.L., 2016. Business Law Today, Comprehensive. Cengage learning.