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Saloman Vs Saloman
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The concept of Limited Liability for a company can be traced back to the 1897 land mark case of Salomon V Salomon and Co Ltd. In this case it was established that the actions of a company, are that of the company and not of the shareholders themselves. This is written into the Companies Act 1993 which states that “a company is a legal entity in its own right separate from its shareholders” (Legislative Extracts, School of Accountancy, 2001). This law separates the company as another individual person/entity which will be held responsible for the fortunes of the company and separates all blame from the directors/shareholders of the company except under situations where the veil is lifted. This will however lead to situations where justice can not be carried out as people will commit various injustices and hide behind the shield that the doctrine, in the case of Salomon V Salomon and Co Ltd created.
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