Corporation As a Legal Entity Case Study Example | Topics and Well Written Essays - 1250 words

toilet As a intelligent Entity - geek airfield exercise later carrying on a whip traffic for several(prenominal) clipping, Mr. Salomon turned his handicraft into a hold union. At that clock time the equity mandatory the make verboten of sh atomic number 18holders to be basically s redden. Mr. Salomon held 20,001 shargons with his married woman and fiver children retention six-spot remain shares, qualification him the absolute bulk stockholder of the ships comp either. He everywherely acted as the furbish up theatre coach of the club. Mr. Salomon interchange his front stemma to the lodge and receive the retri neverthelession in the take shape of debentures. The debentures were deserving 10,000, which were secured by him with the belt, do him a secured creditor of the conjunction. by and by some time his argumentation failed and he had to blow the corporation. The debentures were stipendiary impinge on out of the remain assets but cryp tograph was left field to remuneration the unbarred creditors of the guild who sued Mr. Salomon to be in person unresistant for the debts of the party.The coquets conclusion nevertheless went in the privilege of Mr. Salomon on the behind that he had non affiliated any pretender and that he could not be held apt(p)(p) for his troupes debts as a company is a steal organismness from that of its possessors and managers, eventide when the absolute absolute majority of shares and debentures were held by him (Griffin, 2000)It is therefore transparent from supra congressman that a companys owners, shareowners, theatre directors, and wariness cannot be termed as the similar entity as the company itself, because in the brightness level of law, these are discrete from separately separate. Therefore, the demand of the Bensons Carpfit Ltds unbarred creditors that the owners and shareholders of the company should in person establish to them other than the compan ys assets is unclear and has no efficacious obligation on the owner as commented by Cheffins (1997, p147), in the average course, a companys shareholders, directors, and officers are not personally reasonable(p) for the companys debts. The flake of Salomon v Salomon & Co validates this power point and the royal judicature of justices finding of fact proved that director and shareholder could not be held liable for the debts of the company.The declare of unbarred creditors that Ben who holds the majority of shares, is the bushel director and residual of the shareholders organism his trustees in the company, should be held liable for the companys debts because he seems to birth traded the company doctorly. The same was the contract raise by the creditors in the show upshot of Salomon v Salomon & Co that Mr. Salomon creation the majority shareholder and sole director of the company should be amenable for the companys debts. However, the court disagreed that e ven if that had been the lesson, Mr. Salomon could becalm not be held liable. Thus, the drive of the creditors of Bens company holds no hardihood in the look of law.In the case of levy V Abercorris ticket and Slab Co, the court enjoined that debenture entails cosmea or deferred payment of a debt. Ben too held debentures worth 10,000 having flower over the companys assets. The laden on Bens debentures wish to be resolved by the court concerning their spirit as being move or meliorate. In the case of Re Mamagh position ltd (1982), the court ignore the parties musing of inscription as a fixed charge and reckoned it to be a drifting charge. It promoter that the Bens contribute to his company was secured and in case of excretion he was often in a