The Case Of Salomon V. Salomon & Co Ltd

1872 Words Feb 8th, 2016 8 Pages
It is a well-known principle of company law that the company is a separate legal person, and there is no direct relationship between the shareholders and third parties dealing with the company. This principle was laid down in the landmark case of Salomon v Salomon & Co Ltd {(1897) AC 22}. Given the relative ease with which assets can be held by corporations, the ownership of which may not be easily identifiable, piercing the corporate veil is often necessary to do justice to the parties and is an important technique in the hands of Claimants in fraud claims. In the recent case of Anglo German Breweries Ltd (in liquidation) v Chelsea Corporation Inc {[2012] EWHC 1481 (Ch)} the Court was prepared to take a robust view of the real ownership of assets in order to enforce judgment against a convicted fraudster. The case concerned a now deceased fraudster who had arranged for the purchase of a Bingo Hall while he was awaiting trial on charges of fraud. He arranged for the property to be purchased in the name of Chelsea Corporation, a Corporation registered in Delaware. Following the fraudster’s conviction and imprisonment the corporation was managed in the fraudster’s absence by his daughters. On his release the fraudster resumed his activities in charge of the corporation. He also practised fraud through an English company called AGB.
In 2002 HMRC placed AGB in provisional liquidation and the liquidator sued the fraudster for fraudulent trading and froze his assets,…
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