LEGAL AID OYO JOURNAL OF LEGAL ISSUES VOL. 1, ISSUE 1, 2017. 107 (f) Capacity to sue and be sued. The company as an incorporated body with separate legal personality can sue and be sued in its own name. This is a consequence of its status at law as an artificial person having both the rights and duties accruable to a natural person. The advantage that this consequence of incorporation confers upon the members of the company is that it shields them from litigation which ordinarily in their personal capacity, they would been liable to it however offers a disadvantage in the sense that where the company is being used as a vehicle to perpetuate illegality, it maybe sued and in so doing, have the veil of incorporation which was drawn on it by registration lifted by the courts in order to ascertain the true state of things. Disadvantages for Business As advantageous as the application of the rule established in Salomon v Salomon has been to companies, its operation at times constitute a disadvantage a situation 452 Khan Freund aptly described as calamitous to the growth of company law. Examined below are some of these disadvantages. (a) Helps to Facilitate the evasion of legal obligations The concept of limited liability attracts small traders to the corporate form not because it represents an effective device with which to raise capital, but because it gives them access to 453 an avenue via which to escape the "tyranny of unlimited liability”. The principle is that a limited company's creditors must look at the capital, the limited fund, and that only. Limited liability discourages shareholders from monitoring and controlling their company's commercial ventures. The company's creditors bear the burden of the risks inherent in dealing with limited liability companies.
