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Essay / Research Paper Abstract
This 7 page paper looks at the concept of the separate corporate identity under English law. The paper is written in two parts. The first part critically discusses the nature and significance of the doctrine of separate corporate personality and considers how it is applied. The second part of the paper assess the situations where the doctrine of separate corporate personality may not be applied with reference to case law and statutory examples. The bibliography cites 5 sources.
Page Count:
7 pages (~225 words per page)
File: TS14_TEpercorp.rtf
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Unformatted sample text from the term paper:
This means that the company is seen as an artificial person, with both rights and responsibilities. Much company law flows from this basic assumption, however there are also cases where
the legal personality may be set aside by the courts when there has been wrong doing. As a result of these exceptions it may be argued that corporate personality nothing
more than a fluid concept that allows the courts to choose when to impose liability for corporate wrongdoing. It is certain that the role of corporate personality can be
seen as aiding commercial expediency. The main case that establishes this is that of Salomon v Solomon and Co [1897] A.C. 22, H.L (Gower and Davies, 2003). It was in
this that the full realisation of what the concept of corporate personality actually meant. This case is worth consideration; here there was a leather merchant who ran a successful business.
In 1892 the businesses was converted into a limited company; Salomon & Co. Ltd, which bought the business from Mr Solomon for a total of ?30,000 (Gower and Davies, 2003).
It was found that this figure was not based on a true market value, but was a representation of what he hoped for as the business owner. The subsequent purchase
was funded with ?10,00 in debentures and cash. Salomon owned 20,001 of the 20,007 issued shares, the remained were held by family (Gower and Davies, 2003). When the company failed
and only the debentures were met from the assets the unsecured creditors were not happy. The court of appeal found that the company fa?ade was a sham and did not
abide with the meaning of the Companies Act of the time. This implication here was that the company was an agent of the shareholders, and as such, Salomon was personally
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