Podcast
Questions and Answers
What was the outcome of the Salomon v Salomon & Co. Ltd case?
What was the outcome of the Salomon v Salomon & Co. Ltd case?
What happened to Salomon's shoe business?
What happened to Salomon's shoe business?
What was the claim made by the liquidator in the Salomon case?
What was the claim made by the liquidator in the Salomon case?
What is the principle laid down in Salomon's case?
What is the principle laid down in Salomon's case?
Signup and view all the answers
What is the implication of the transfer of ownership of shareholders according to Abdul Aziz bin Atan v Ladang Renggo Malay Estate Sdn Bhd?
What is the implication of the transfer of ownership of shareholders according to Abdul Aziz bin Atan v Ladang Renggo Malay Estate Sdn Bhd?
Signup and view all the answers
What is the approach of Malaysian courts regarding the principle laid down in Salomon's case?
What is the approach of Malaysian courts regarding the principle laid down in Salomon's case?
Signup and view all the answers
Study Notes
Case Overview: Salomon v. Salomon & Co. Ltd (1897) AC 22
- Salomon owned a shoe business and established Salomon & Co. Ltd to formalize it.
- The company was formed as a separate legal entity, distinct from its owner Salomon.
- Salomon sold his shoe business to the newly incorporated company.
- The company issued debentures (a type of debt security) to Salomon in exchange for the business.
- Eventually, the company became insolvent, prompting a liquidator to examine its debts.
- The liquidator attempted to claim salomon's debentures, questioning their validity due to Salomon's control over the company.
Court Ruling and Principles Established
- The court ruled that once a company is legally incorporated, it operates as an independent entity.
- The rights and liabilities of the company are separate from those of its owner or promoters.
- The court emphasized that the motivations of the promoters are irrelevant when assessing the company's obligations.
Application in Malaysian Law
- The principle from Salomon's case is recognized and applied in Malaysian legal decisions.
- In Goh Hooi Yin v. Lim Teong Ghee, it is noted that Malaysian courts are obliged to adhere to Salomon's principles, barring compelling reasons to deviate.
- In Abdul Aziz Bin Atan v. Ladang Rengo Malay Estate Sdn. Bhd, it was highlighted that a change in the ownership of shareholders does not affect the identity or entity of the company itself.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz covers the landmark court case of Salomon v Salomon & Co Ltd (1897) AC 22, where the court established the principle of separate legal entity of a company. Learn about the facts and judgement of this important case. Test your knowledge on company law and corporate personality.
