Q:

What was the Salomon v. Salomon case?

A:

Salomon v. Salomon was a case in Great Britain in 1897 that established the concept of the "corporate veil," according to McGill University. This case established the corporation as a different entity than the people within the corporation, specifically the shareholders. The case also created legal liability against the corporation instead of an individual person.

Salomon v. Salomon involved the Salomon family, who owned the majority of shares in a leather company, according to The National Archives of the United Kingdom. After a strike, the business lost profits and went bankrupt. The value of the corporation at the time of insolvency was below the value of the debts. Creditors sued the individual shareholders for the rest of the funds. Even though the majority owner of the company was one family, the House of Lords held that a corporation is separate from the individuals. Only the corporation held the debt; the individual shareholders did not hold the debt. As part of a legal incorporation, the liability was more minimal than that of a partnership or sole proprietorship, according to Examination Preparation Services.

Though Salomon v. Salomon was a case in English common law, courts in other countries cite the case as part of corporate law, according to WIkipedia. Subsequent cases, however, limit the corporate veil and provide instances for lifting it.

Learn More

Related Questions

  • Q:

    What makes a contract null and void?

    A:

    A contract is null and void when it can no longer be legally enforced. If one party to the contract gives an indication that it is unable to hold up its end, the other party may claim an anticipatory breach of contract. If the agreement is unconscionable or grossly unfair to one party, or one party commits fraud, the contract may be void.

    Full Answer >
    Filed Under:
  • Q:

    What is Florida's law for slip-and-fall settlements?

    A:

    Since the introduction of Florida Statute 768.0755 in 2010, slip-and-fall laws favor business owners, requiring plaintiffs to prove that the establishment should have been aware of the spill, states Alan C. Nash with the Marshall Dennehey firm. Without circumstantial evidence to support the claim, victims find it hard to win.

    Full Answer >
    Filed Under:
  • Q:

    What rights do renters have in the event of an eviction?

    A:

    Renters have the right to be served with a legal notice of an eviction, and landlords cannot move renters and their property out without the assistance of a law enforcement officer, says Nolo. Evictions must be preceded by a termination of tenancy.

    Full Answer >
    Filed Under:
  • Q:

    What is the difference between criminal law and civil law?

    A:

    State or federal government bring criminal actions against parties that are accused of violating the law and civil actions are non-criminal acts brought against those accused of violating private rights. Examples of criminal law include murder, kidnapping, embezzlement or theft. Civil law examples include breach of contract, compensation-related cases and fraud.

    Full Answer >
    Filed Under:

Explore