Question

Principles laid down in law in the case of Salmon Vs Salmon and Co Ltd 1897. AC 22

Answer 1

Principles laid down in law in the case of salmon vs salmon and Co 1897 are as follows

1) It recognised the separate legal entity of the company distinct from that of the shareholders

2) It recognised the limited liability of members

3) It recognised that members can give loan to compmay

4) It recognised that a secured creditor(over assets), even he is a member ordirector of the company, will have preference over unsecured creditors

5) It lifted the corporate veil of the company

6)Any rights, obligations or liabilities of a company are discrete from those of its shareholders

7) The shareholders cannot be called to pay the debts of the company