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The rule in Salomon v Salomon & Co [1897] AC 22 has been described as one of the corner stones of English Company Law. Discuss the rationale and impact of the decision on company law Essay Example

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The rule in Salomon v Salomon & Co [1897] AC 22 has been described as one of the corner stones of English Company Law. Discuss the rationale and impact of the decision on company law

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The principle has enshrined depictions in section 124 in Corporations Act. The judiciary has consistent reaffirmations of the need of treating the legal doctrine with few exceptions. Subsequent Australian and English decisions of the court uphold the Salomon principle. Since Salomons case had the decision, the entire separation of company and members is rather evident. The ruling stands the test of time even with few exceptions (Routledge. 2010, p 352).In theory, the application of the principle is straightforward. Most theories in the corporate entity are in agreement of the practical essence of artificial personalities that legal systems invest in corporations. All concession theorists regard corporate personality to be privileges the state grants for business and legal convenience. In addition, the contractarian school of thought insists that corporation law offers a reduced component of transaction costs through the implication of every corporate charter as normal rights where shareholders are expected to focus on including separate legal status. The principle is based on corporate law and operates as a default provision in facilitating corporate activity (Mäntysaari, 2006, p 125). The view is taken by the aggregate theorists in praising the Salomon principle roles in assisting contractual formation of relationships constituting a backbone of exclusive aggregations for individuals where the law distinguishes as corporations.The human initiative and interaction consequence is that it owns the capacity and will for action. It appears that there are theoretical unanimities on practical requirements for principles for corporation and legal entities of entirely different elements of its members (Bourne, 2013, p 162). However, the major issue is that this is an entitlement of the Salomon principle against robust judicial systems. From practical perspectives, the approach to implementation of above demands has close attention on detail. Separate legal personalities for corporations are the reasons why corporations are favored for conducting social organization or commercial enterprise. The argument is that Companies show desirable elements when such arrangements are aimed at pivoting them on convenient and realistic grounds to erect direct individual human beings. Individual human beings are short-lived, fickle, and hard to organize into larger-scale political and

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References

Hannigan, B. 2012. Company Law. New York: Oxford University Press.

Kershaw, D. 2012. Company Law in Context: Text and Materials. New York: Oxford University Press.

Ferran, E., & Ho, L. C. 2014. Principles of Corporate Finance Law. New York: Oxford University Press.

Bourne, N. 2013. Bourne on Company Law. New York: Routledge.

Padhi, P. K., 2012. Legal Aspects of Business. New York: PHI Learning Pvt. Ltd.

Mäntysaari, P. 2006. Comparative Corporate Governance: Shareholders as a Rule-maker. New York: Springer Science & Business Media.

Mäntysaari, P. 2009. The Law of Corporate Finance: General Principles and EU Law: Volume I: Cash Flow, Risk, Agency, Information. New York: Springer Science & Business Media.

Routledge. 2010. Company Lawcards 2010-2011. New York: Routledge.

Goulding, S. 2013. Principles of Company Law. New York: Routledge.

McLaughlin, S. 2014.Unlocking Company Law. New York: Routledge.

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preview essay on The rule in Salomon v Salomon & Co [1897] AC 22 has been described as one of the corner stones of English Company Law. Discuss the rationale and impact of the decision on company law
  • Pages: 10 (2500 words)
  • Document Type: Essay
  • Subject: Law
  • Level: Ph.D.
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