Question: Company Law - Question One 68% ‘Since the Salomon decision, the courts have been called upon to apply the principles of separate legal personality in what might be called difficult situations. In some cases, they have upheld the principle and in others, they did not.’ Critically discuss the above statement with particular reference to developments since 1966.
Answer: The recognition of the legal personality of the company is clearly its most important feature in law (Schmitthoff, 1976). This recognition derives from the decision in Salomon v Salomon & Co Ltd[1]. In this leading case, the House of Lords held that, regardless of the extent of a particular shareholders interest in the company, and notwithstanding that such shareholder has sole control of the company\\\'s affairs as its governing director, the company\\\'s act were not his acts, nor were its liabilities his liabilities. Thus, the fact that one shareholder controls all or not virtually all, the shares in a company is a sufficient reason for ignoring the legal personality of the company.......(short extract)
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Details: - Mark: 68% | Course: Commercial Law | Year: 2nd/3rd | Words: 2793 | References: Yes | Date written: April, 2004 | Date submitted: February 17, 2009 | Coursework ID: 247
