Salomon v. A Salomon & Co. Ltd [1897] AC 22 is the most important decision ever made by the English courts in Relation to company law.

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Name: JI KE Department: International Finance College

Beijing Normal University

Faculty of Business, School of Law

Kingston University

Lecturer: Mr. John Tribe, Kingston University

Commercial Law Assignment Due Date: Dec 10

A: Salomon v. A Salomon & Co. Ltd [1897] AC 22 is the most important decision ever made by the English courts in Relation to company law.

The fundamental concept to become familiar with when commencing a business is the idea that the business has a legal personality in its own right, particularly when it assumes the form of a Close Corporation, or a Limited Liability Company. This essentially means that if one commences business as a Close Corporation, or as a Limited Liability Company, then the Corporation or Company is a legal entity with distinct legal personality separate to that of the owners, members, or shareholders.(2)

As a separate entity, the company is distinct from the directors, employees and shareholders. And the distinction has been rightly insisted by the law that it should be duly observed: Lee v Lee's Air Farming Ltd [1961] AC 12. "In particular the company does