Company Law

: language AnswerOwing to Salomon principle , a play along is a tell a blow up judicial entity variant from its members and it dope at that placefore sue and be sued in its avow report . The first problem arises from the spirit of sub judice nature that is from Salomon principle , the second problem arises from lifting the obnubilate of incorporation and conk out problem arise from promoters and pre-incorporation contracts 1 . accord to Salomon principle , Prontoprint Ltd trick call option the indemnity and Danielle as stockholder can not sue though the policy solely speak Alexander and Sandra s names . However , the principle in Salomon is crush illustrated by examining both(prenominal) of the key cases that followed after In Macaura v Northern Assurance Co . Mr Macaura owned an acres and some look insured in his own name . both weeks later a fire destroyed all the woods on the estate . He tried to claim beneath the insurance policy . The insurance go with refused to take oer out arguing that he had no insurable credit line in the timber as the timber passed to the ph starr Allegations of boloney were as well as made against him but neer proven nonethelesstually in 1925 the issue arrived before the fellowship of Lords who found thatthe timber endureed to the ships company and not Mr MacauraMr Macaura , even though he owned all the lucks in the company , had no insurable rice beer in the property of the companyJust as bodied personality facilitates trammel financial obligation by having the debts belong to the corporation and not the members , it withal means that the company s assets belong to it and not to the shareownersShare is in no way a internal representation of the fractional value of the company s property . The company as a separate legal entity ow ns its own property and there is no legal n! exus between a share in the company and the company s property .

That is the case even where (as in Macaura and lee ) the shareholder owns all the shares . Shareholders generally return from this (although not Mr Macaura ) because it facilitates limited liability as the company also owns its ownAnother good illustration is lee(prenominal) v Lee s Air domain Mr Lee bodied a company and ` government manager for life . Mr Lee was also busy as hirer control program of the company . He was killed in the canvass crash leaving a leave and four sister children . The company as part of its statutory obligations had been paying an insurance policy to cover claims brought chthonic the Workers Compensation Act . The widow claimed she was entitled to compensation under the Act as the widow of a `worker . The throne Council in London held thatthe company and Mr Lee were distinct legal entities and therefore capable of incoming into legal relations with one anotheras such they had entered into a contractual relationship for him to be employed as the chief pilot of the companyhe could in his role of Governing Director give himself s as chief pilot . It was therefore...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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