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09-Dec-2017 06:11

A corporation is a separate legal entity from its owners.

In other words, if a corporation, in the course of doing business, is involved in any legal action, then the corporation, for legal purposes, is its own person.

These are the exceptions to the rule in Salomon’s Case, when the corporate veil is lifted and the reality of the situation is examined.

It was held that As soon as citizens form a company, the rights guaranteed to them by article 19(1)c has been exercised and no restraint has been placed on the right and no infringement of that right is made.

For all intents and purposes, all acts taken by these two company types are taken by the owners themselves.

The company becomes a legal person in its own right, distinct from the This was seen in the famous case of Salomon v Salomon & Co Ltd (1897).

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In this case, Mr Salomon was the major shareholder, a director, an employee and a creditor of the company he created.The liquidator and the other creditors objected to this, claiming that it was unfair for the person who formed and ran the company to get paid first.



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