Issues in the Case
The two main issues that were raised based on the above facts were:
1. Whether Salomon & Co. Ltd. was a legally valid company?
2. Whether Salomon was liable for the debts of the company?
Salomon vs Salomon: Case summary
Salomon vs. Salomon is a landmark case in Company law that set up the principle of corporate character and the idea of a Separate Legal Entity. This case, heard inside the House of Lords in 1897, laid the foundation for the present-day business enterprise shape and appreciably prompted company regulations worldwide. In the area of Company law, the idea of a Separate Legal Entity means that an organization is independent of its shareholders. This separation creates a Corporate Veil, shielding shareholders from the employer’s money owed and liabilities.
Geeky Takeaways:
- Name of the Case: Salomon v Salomon & Co. Ltd.
- Citation: (1897) A.C. 22, [1896] UKHL 1
- The concept of a Separate Legal Entity emerged after the case of Salomon vs Salomon.
- In this case, it was held that no person could hide behind the company’s entity to commit fraud and avoid any sort of liability.
Table of Content
- Facts of the Case
- Issue in the Case
- Judgment/Ruling in Salomon vs Salomon
- Corporate Veil
- The Exception of Veil Piercing
- Conclusion
- Frequently Asked Questions (FAQs)