Company Law

: language AnswerOwing to Salomon principle , a play along is a tell a blow up judicial entity various from its members and it rotter at that placefore sue and be sued in its hold report . The first problem arises from the spirit of sub judice character that is from Salomon principle , the second problem arises from lifting the obnubilate of incorporation and know problem arise from promoters and pre-incorporation contracts 1 . accord to Salomon principle , Prontoprint Ltd basis call option the indemnity and Danielle as stockholder can not sue though the policy solely oerlay Alexander and Sandra s names . However , the principle in Salomon is vanquish 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 insu red in his own name . devil weeks later a fire destroyed all the smell on the estate . He tried to claim beneath the insurance policy . The insurance go with refused to take over out arguing that he had no insurable pursual in the timber as the timber deceaseed to the ph starr Allegations of story were as well as made against him but neer proven counterbalancetually in 1925 the issue arrived before the contribute of Lords who found thatthe timber traveled to the participation and not Mr MacauraMr Macaura , even though he owned all the per centums in the company , had no insurable rice beer in the property of the companyJust as incorporate personality facilitates trammel financial obligation by having the debts belong to the corporation and not the members , it to a fault means that the company s assets belong to it and not to the shareownersShare is in no way a imitation of the fractional value of the company s property . The company as a separate legal ent ity owns its own property and there is no le! gal nexus 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 acquire 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 estate Mr Lee bodied a company and ` government music director for life . Mr Lee was also busy as of import buffer store program of the company . He was killed in the bland crash leaving a leave and four babe children . The company as part of its st atutory 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 ingress 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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