- Case Study Salomon V Salomon Ltd 1986 Introduced The Foundational Principle Of English Company Law The Separate Lega 1 (147.7 KiB) Viewed 11 times
Case study: Salomon v Salomon Ltd, 1986, introduced the foundational principle of English
company law, the separate legal personality of a
company. Up until this time the relations of a
company had mainly been transactional and wide scale investment was dissuaded as shareholders were liable for any debts that a
company accumulated. The concept created a 'veil' of incorporation, separating the debts, assets, obligations and rights of the
company from its shareholders and directors. However there are cases where courts (through the judiciary or legislature) have 'lifted the veil' of incorporation and identified members or directors as having personal liability for actions of the
company. This essay will examine the extent to which the separate legal personality of a
company equates to shareholders and directors not being responsible for liabilities that arise from the actions of the
company. Based on the above case study: 1. To what extent does the veil can be lifted from the case study. Discuss and make comparison between judiciary or legislature method in lifting the veil. 2. In conclusion from your answer in
question no. 1, justify whether the veil is needed or not needed. Relate your justification to the case study.