Mr. Salomon offered his enterprise to the new company for nearly £39,000, of which £10,000 was a debt to him. He was thus concurrently the corporate’s principal shareholder and its principal creditor. The House of Lords within the Salomon case affirmed the legal principle that, upon incorporation, a company is usually thought-about to be a new legal entity separate from its shareholders. The courtroom did this in relation to what was essentially a one individual Company, which is Mr Salomon. The concept of limited liability was invented in England in the seventeenth century, and previous to this period, people have been scared to spend money on firms as a result of any associate in a general partnership could possibly be held responsible for all of the money owed of the corporation.
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The lord justices of attraction variously described the corporate as a … Read More