LEGAL AID OYO JOURNAL OF LEGAL ISSUES VOL. 1, ISSUE 1, 2017. 105
House of Lords Salomon appealed to the House of Lords which rejected the lower courts' rulings The House of Lords in unanimously overturning this decision, rejected the arguments from agency and fraud. They held that there was nothing in the Act about whether the subscribers (i.e., the shareholders) should be independent of the majority shareholder. The company was duly constituted in law and it was not the function of judges to read into the statute limitations they themselves considered expedient. From this
judgment of the House of Lords, the concept of "a company" was seen as a legal entity in its own right. The very heart of separation and independence from those involved in the company's management and structure was established as a result of
Salomon's case. If creditors dealt with the company it was to the latter to
which recourse had to be made, not to those who were behind the entity. Over the years that followed Salomon, this became known as the veil of incorporation”
445
time however, would severely erode this traditional perception as would be seen later in the course of this paper.
Share with your friends: