Salomon v. Salomon & Co. Ltd. (1897): A Detailed Case Law Summary in Easy Language
Introduction Salomon v. Salomon & Co. Ltd. (1897) is one of the most important and landmark case laws in company law. This case clearly established the principle that a company is a separate legal person , different from its owners or members. Every student of Company Law—especially under the Companies Act—must understand this case. Background of the Case Mr. Aron Salomon was a leather merchant running a successful sole proprietorship business in England. Later, he decided to convert his business into a limited company. At that time, the law required at least seven persons to form a company. So, Mr. Salomon formed a company with: Himself His wife His five children Each family member took one share, while Mr. Salomon took the remaining shares and controlled the company. The company was named Salomon & Co. Ltd. How the Company Was Structured Mr. Salomon sold his existing business to the company. The purchase price was paid partly in shares and ...