CIMA BA4 · Chapter 13 · Question 1 of 10
Under English law, what is the principle established in Salomon v Salomon & Co Ltd?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) A registered company is a separate legal person, distinct from its members
Explanation
Salomon established that a properly incorporated company has a separate legal personality from its members, even where one person holds almost all the shares. Consequently, the company owns its property and is liable for its own debts, and members' liability is limited to any amount unpaid on their shares.
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