SOLOMON Vs SOLOMON & CO.LTD.(1897)A.C.22

1. Salomon VS Salomon & co. ltd.(1897) ghanshyamgupta7@gmail.com 9015264601 2/24/2010 1 Ghanshyam IILM Gurgaon

3. Converted his business into a limited co.

4. Company purchased the business of Solomon at 40000 pound.

5. Purchase consideration was in terms of 10000 debenture, 20000 equity share and 10000 was in cash2/24/2010 2 Ghanshyam IILM Gurgaon

7. The wife and five elder children became subscribers and two eldest sons also directors.

8. Realized value of all the assets was 6000 pound.

9. Value of all the creditors is 17000 pound out of which 10000 was secured, held by Mr. Salomon & rest are unsecured.2/24/2010 3 Ghanshyam IILM Gurgaon

11. The assets of the company is not sufficient.

12. Nothing was left for unsecured creditors2/24/2010 4 Ghanshyam IILM Gurgaon

15. SLE legally separate business from individual or owner Like limited liability company or a corporation 2/24/2010 6 Ghanshyam IILM Gurgaon

18. on the contrary Salomon was a victim in that he did his best to rescue his company by cancelling the debenture he took and raising them to an outside creditor who provided fresh loan capital. 2/24/2010 8 Ghanshyam IILM Gurgaon

21. And regarding the company instead as a myth and fiction, they thought that the business belonged to Aron Salomon.2/24/2010 10 Ghanshyam IILM Gurgaon

22. Conclusion The House of Lords found that honesty and good faith on Salomon’s part prevented him from assuring the company creditors as they knew they were dealing with a legal person totally different from his incorporators. Limited liability at that time was also available to sole traders and large investors who wanted some form of limit on their undertakings. 2/24/2010 11 Ghanshyam IILM Gurgaon

24. www.docstoc.com/docs/7624612/company (22-01-10 at 8.45 pm).

25. www.slideshare.net (25-01-10 at 8.50 pm).

26. www.coursework.info(23-01-10 at 9.30 pm).

27. Mercantile Law by Avatar Singh.2/24/2010 12 Ghanshyam IILM Gurgaon