Criticism of Salomon vs Salomon Co. Ltd

Salomon v. A. Salomon & Co. Ltd. Salomon v. A. Salomon & Co. Ltd. (1897) AC 22 is a landmark UK company police force case. The effect of the Lords unanimous ruling was to uphold firmly the philosophical system of corporate personality, as set out in the Companies subroutine 1862, so that creditors of an insolvent company could not execute the companys shareholders to grant up outstanding debts. Facts of the case : Mr. Aron Salomon made whip boots and home in a large Whitechapel High pass establishment. He ran his line of merchandise for 30 years and he might sanely have counted upon retiring with at to the lowest degree £10,000 in his pocket. His sons valued to become stage vexation partners. So he turned the business into a limited company. His wife and phoebe bird eldest children became subscribers and his ii eldest sons excessively directors. Mr. Salomon took 20,001 of the companys 20,007 shares. The price glacial by the deoxidise for the sale of the busine ss to the company was £39,000. tally to the court, this was extravagent and not anything that bunghole be cal guide a business bid or reasonable estimate of value. Transfer of the business took fanny on June 1, 1892. The bribe money the company paid to Mr. Salomon for the business was £20,000. The company also gave Mr. Salomon £10,000 in debentures: i.e.

, Salomon gave the company a £10,000 loan, secured by a heading over the assets of the company. The balance paid went to annihilate the businesss debts (£1,000 of which was cash to Salomon). in short after Mr. Salomon incorporated his business a series of strikes in the shoe in dustry led the government, Salomons main cus! tomer, to split its contracts among more firms. The government emergencyed to diversify its translate base to exclude the risk of its few suppliers being cripple by strikes. His warehouse, as a consequence, was full of unsold stock. He and his wife add the company money, and he cancelled his debentures, simply the company needful more money, so they sought £5,000 from a Mr. Edmund Broderip. Mr. Salomon assigned Broderip...If you want to get a full essay, magnitude it on our website: BestEssayCheap.com

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