Legal aid oyo journal of legal issues vol. 1, Issue 1, 2017

LEGAL AID OYO JOURNAL OF LEGAL ISSUES VOL. 1, ISSUE 1, 2017.
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THE SALOMON PRINCIPLE OF WHAT RELEVANCE IN TODAY’S BUSINESS
WORLD?
By
Oluwafemi A. Ojosu LLB. (AfeBabalola University, BL. Legal practitioner at Tunde and Adisa Legal Practitioners femiojosu@yahoo.com

ABSTRACT
The corporate personality principle, as is examined in this paper, was developed in the locus
classicuscase of Salomon v. Salomon. It posits that upon incorporation, a company becomes an entity separate and distinct from its members. This principle has played a very fundamental role in the development of company law as we know it today due to its consistent application by the courts albeit with certain tergiversations as is common with principles developed under the Common Law. Of recent however, its relevance to the modern business world has been questioned. Thus, creating within the legal community the quagmire is the Salomon Principle still relevant in today‟s business world This paper examines the history of the Salomon Principle, its consequences, advantages and disadvantages for business, and the trend in its application with the conclusion that YES the doctrine of corporate personality as established in the case of Salomon v Salomon still retains its relevance in today‟s business world.
Key Words Salomon v. Salomon, corporate personality, incorporation, lifting the veil, business
INTRODUCTION
Historically, prior to the formation of companies, the common law principle of corporate personality had always been in existence although not in the form we now know it. It began as a medium through which legal personality was conferred upon religious groups most notably the church for the sole purpose of surmounting the issue of succession and ownership which usually arose on the passing away of one religious leader with the effect that the head of the institution would be regarded only as a custodian of the group property without having a personal right to it. This was the beginning of the corporation. The religious group was regarded as the person and therefore, was conferred with the power to hold land and property and also defend same in its own name which did not in anyway affect the personal properties of the members.
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