BTF1010 Study Guide - Final Guide: Legal Personality, Apparent Authority, Sole Proprietorship
11 Sep 2018
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Introduction to company law: salomon v salomon & co ltd [1987] ac 22 (pg 508) Facts: salomon was a boot manufacturer who originally operated a business as a sole trader. He converted the business into a company as several of his sons worked with him. His sons and wife were given a share each. He was the md and his sons were directors. Salomon sold his business to the company and received more shares and secured loan from the company. The company went into liquidation and salomon was sued for (cid:272)o(cid:373)pa(cid:374)y"s debt. Salomon on the other hand argued that he was not the company. Decision: the court held that a company was a separate entity from its shareholders and it conducts business in its own name. This case established the principle that control and management of business is distinct from its ownership. (cid:1005)(cid:1011)4. Lee v lee"s air far(cid:373)i(cid:374)g ltd [(cid:1005)9(cid:1010)(cid:1005)] ac (cid:1005)(cid:1006) (pg 509)
