Case review solomon vs solomon co
It was not the function of judges to read limitations into a statute on the basis of their own personal view that, if the laws of the land allowed such a thing, they were "in a most lamentable state", as Malins V-C had stated in an earlier case in point, In Re Baglan Hall Colliery Co.
I should rather liken the company to a trustee for him - a trustee improperly brought into existence by him to enable him to do what the statute prohibits.
A majority shareholder does not own the Company. One argument was addressed to your Lordships which ought perhaps to be noticed, although it was not the ground of decision in either of the Courts below. The object of the whole arrangement is to do the very thing which the Legislature intended not to be done.
It was said that the assets were sold by an order made in the presence of Mr. The reservation in the order seems to me to be simply nugatory.
The judge, Vaughan Williams J. Therefore the minor unsecured creditors got nothing from the liquidation. Salomon and the other subscribers to the memorandum were associated was "lawful.
Salomon v salomon critical analysis
Salomon had created the company solely to transfer his business to it, the company was in reality his agent and he as principal was liable for debts to unsecured creditors. However, these individuals only represent the company and accordingly whatever they do within the scope of the authority conferred upon them and in the name and on behalf of the company, they bind the company and not themselves. A man may do that and yet be under no such liability as Mr. Judicial Interpretations It is difficult to deal with all the cases in which courts have lifted or might lift the corporate veil. Salomon had created the company solely to transfer his business to it, then the company and Salomon were one unit; the company was in reality his agent and he as principal was liable for debts to unsecured creditors. The company was put into liquidation. In other words, once he or she or someone who held the shares previously has paid that nominal value plus any premium agreed on when the shares were issued, he is no longer liable to contribute anything further. It is idle to say that persons dealing with companies are protected by s. If, however, the declaration of the Court of Appeal means that Mr. If the legislature thinks it right to extend the principle of limited liability to sole traders it will no doubt do so, with such safeguards, if any, as it may think necessary. Salomon and the other subscribers to the memorandum were associated was "lawful. It was argued that the agreement for the transfer of the business to the company ought to be set aside, because there was no independent board of directors, and the property was transferred at an overvalue. If it was, the business belonged to it and not to Mr.
But it does not follow that the order made by Vaughan Williams J.
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