The Legal Principles Of The Case Of Salomon V. Salmon And Co Ltd.

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The legal principle on company law established by the case “Salomon v Salomon & Co Ltd” is that a company upon incorporation is a body corporate which is recognized by law to have a separate legal entity from its members and officers. The company and members are two separate bodies. This is known as the veil of incorporation. Thus, the debts of the company cannot be recovered from its members. For example, the debts of the company cannot be recovered from its member. Rather than the director or its member, a company is normally liable for any breach by itself. A company is an artificial legal person that exists independently of the individuals who at any given time are the members of the corporate body. In the case of Salomon V Salomon & Co Ltd, even though Salomon managed the business solely by himself, yet in law Salomon and the company is separate body as the company has incorporated. As a legal entity by itself, company can: 1. Enjoy perpetual existence and has its own legal personality. 2. Has its own legal personality. 3. Is separate from its members and officers and the change of its members and officers does not affect its legal personality. 4. Sue and be sued in its own name. 5. Deal with property itself. 6. Liable for its debts,…show more content…
According to section 16(6) of the Companies Act 1965, upon incorporation, the persons whose names appear in the company’s register of members from time to time shall be the members of the company and together they shall be a body corporate. Under section 16(5) of the Companies Act 1965, the body corporate enjoys separate legal entity with an existence that does not depend on the identity of its members and members of the company shall be liable to contribute to the assets of the company in the event of being wound up. However, the liability of the members will depend on whether the company is a limited company or an unlimited
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