Salomon v A Salomon & Co Ltd

The appellant company (Youyang) was trustee of a discretionary trust formed in 1974 for the Hayward family. Minter Ellison Morris Fletcher’s (Minters) had been acting for EC Consolidated Capital Limited (ECCCL) since July 1991, all work in connection with the drafting of the documents relating to the subscription for preference shares in ECCCL was dealt with by Minters. As part of the subscription agreement Youyang deposited $500,000 in Minters trust account. Minters was entitled to release a section of the fund from the trust account to ECCCL for the purchase of a bearer deposit certificate to be issued by Dresdner International Financial Markets (Australia) Ltd (DAL), which could then be traded on the money market. When the certificate was obtained Minters then had the right to release the remainder of the funds to ECCCL based on the subscription agreement.

The dispute occurred in Victoria between a registered company, Tallerman & Co Pty Ltd ("the plaintiff") and an incorporated company, Nathan's Merchandise Pty Ltd. ("the defendant), where both parties operated their business. Two previous binding contracts (orders No. 58 and No. M57) were made in communications on 14th May 1951 and 2nd August 1951 respectively, each for the sale by the plaintiff to the defendant of 1,000,000 Hungarian .22 bullets. A consignment of 1,800,000 bullets for the above orders was dispatched from Sydney to the defendant by rail on the 12th February 1952 and was received by a carrier employed by the defendant in

This essay will explain the concepts of separate personality and limited liability and their significance in company law. The principle of separate personality is defined in the Companies Act 2006(CA) ; “subscribers to the memorandum, together with such other persons as may from time to time become members of the company are a body corporate by the name contained in memorandum.” This essentially means that a company is a separate legal personality to its members and therefore can itself be sued and enter into contracts. This theory was birthed into company law through the case of Salomon v Salomon and Co LTD 1872. This case involved a company entering liquidation and the unsecured creditors not being able to claim assets to compensate them. The issue in this case was whether Mr Salomon owed the money or the company did. In the end, the House of Lords held that the company was not an agent of Mr Salomon and so the debts were that of the company thus creating the “corporate Veil” .

In this case, Success Assets Pty Ltd (Success) borrowed money from Statewest Credit Society Ltd (Statewest) to purchase land, and the land was mortgaged as security. The plaintiff entered into a guarantee in favour of Statewest which secured the loan and all future loans from Statewest to Success. Success used money borrowed from Home Building Society Ltd (Home) to pay the loan from Statewest. Statewest’s rights under the guarantee (which includes those relating to future loans) and Home’s rights under the were transferred to the defendant, Bank of Queensland (BOQ).

The court verified that a person is a partner and jointly liable with others in the firm “if his agreement with them is that he should be paid by the firm a fixed sum, irrespective of profits, for work done by him”.

Tomasic, R. Jackson, J. & Woellner, R. (2002). Corporations Law: Principles, Policy and Process. 4th ed. Sydney: Butterworths

The case of GRUENDL v. OEWEL PARTNERSHIP INC. the overall partnership of OPL is OPI and not a plaintiff exclusively, a circumstance of which the defendant was mindful. The plaintiff may possibly be judged to have contributed in governing of OPL simply because he implemented his responsibilities as president of OPI or because he may have represented as a indemnity for, or loaned funds to, OPL. (Corp.Code, § 15632, subds.(a), (b)(1) & (3).) Furthermore, nothing in the records suggests that the plaintiff, in his capability as a limited partnership, should be held accountable for OPL's partnership liabilities.

Cordeaux Gabelle is still claiming damages of 14.6m even though I argued that section 11 of Securities Act 1993 is not relevant in this case, because the company was sold privately and not by public offering. I supported my argument by Supreme Court ´s decision in Gustafson v. Alloyd Co.

Investors are liable only for the amount of capital that they have invested, but not for any costs incurred as a result of corporation’s actions (e.g. injuries, deaths and tort claims). An ethical issue has to do with the accountability of the directors, executives and shareholders under the law. Under the law every person is liable for their wrongdoings, while the executives, directors and shareholders shift their accountability onto the invisible friends by a way of limited liability. According to Glasbeek (2002), “Legal logic–—and no other—— will permit Black to say that, in a society based on individual responsibility, he cannot be made responsible for the acts of a truly discrete, separate person, Hollinger, the corporation” (p. 11).

Salomon v Salomon and Co. Ltd (1897) AC 22 - when Aron Salomon sold his business to Salomon and Co. Ltd. Company, where he was still the major shareholder and some of his family was also a member. He also received a debenture as part of the payment for a secured term. But when the company has gone into liquidation during the 1890’s some argued that his

Among all the stakeholders in this case the only one whose decision is uncertain is Tom’s. While Tom has an important stake in this case, Stubbs will be the one that experiences the monetary effects of Tom decision. Annette was the one that told Tom what to do, but even at that moment Tom is the one who can act one way or another. On top of that, given Annette’s advice, she already decided to act for the company’s stake and not Stubbs. Given the company’s statement that they only have records for five years, it is to be assumed that the company is not encouraging any employee to find any older records concerning this lawsuit. It is also safe to assume that the machine manufacturing company would prefer to find any evidence to blame someone else for Stubbs accident. Therefore, the one individual which can decided the fate of all stakeholders is

An article published on the 27/02/2018 by Jade Rowarth depicts a long running conflict between the liquidators of Akron Roads PtyLtd , a company which was previously involved in the civil construction industry ; and CGU insurance LTD which had guaranteed full insurance to Mr Trevor Crewe and his organisation Crewe Sharp Pty Ltd in association to the management consulting services they supplied to Akron Roads. The liquidators issued an insolvent trading claim against Crewe Sharp for more than $14,000,000(Rowarth, 2018).

The concept of a company being a separate legal entity is the most striking illustration in separating the company from its owners. A paramount principle of corporate law is that no shareholder or member of a company is made liable for the obligations incurred by such incorporations A company is different from its members in the eyes of law. In continuations to this the opposite also holds true in the sense that neither can the company be held liable for the acts of its members. It is a fundamental distinction that a company is distinct from its members.

There is no clear framework of the rules that would cover the contingencies of a ruling to pierce the corporate veil Idoport Pty Ltd v National Australia Bank Ltd. The corporate Veil usually protects owners and shareholders from being held liable for corporate duties. Yet again a decision made by the court to lift that veil and would place the liability on shareholders, owners, administrators, executives and officers of the company without ownership interest. The purpose of this essay is to conduct an analysis on the concept of lifting the corporate veil and to review the different views on its fairness and equitability to present a better understanding of the notion, the methods used was throughout researching the numerous scholars views on the subject, case law and statutes examples, and the evidence provided by the empirical study of Ramsay & Noakes. When we discuss the lifting the corporate veil the first case that pops out is the case of Salomon V A. Salomon & Co Ltd, since the decisions of applying the corporate veil were first formed as a consequence of this case. The idea covers all of company law and distinguishes that a company is a separate legal entity from its members and directors. Furthermore, spencer (2012); have indicated that one of the core principles that followed the decision in Salomon v Salomon was the wide acceptance one man company’s. However In order to form a

This doctrine has been seen as a “two- edged sword,” reason being that at a general level while it was seen as a good decision in that by establishing that corporations are separate legal entities, Salomon 's case endowed the company with the entire requisite attributes with which to become the powerhouse of capitalism. At a particular level, however, it was a bad decision. By extending the benefits of incorporation to small private enterprises, Salomon 's case has promoted fraud and the evasion of legal obligations.