Discuss the rationale and impact of the decision on company law Essay - 1

junk the rationale and impact of the determination on political party law - Essay ExampleThe case and its ensuant ruling were significant in informing successive laws that would help mitigate on the numerous dispute arising from business engagement. The doctrine of corporate identity for example exempts the shareholders of an insolvent company from any case by creditors since the company becomes the defendant in such cases.Mr. Aron Salomon ran a successful shoe manufacturing in the United Kingdom. The tingle manufacturing business was a major success thus enticing his sons who expressed interest in joining the business. As such, Mr. Salomon turned his business into a limited company, which then purchased his previous business at a cost of 39,000. Mr. Salomon became the companys largest shareholder after he purchased 20,001 shares of the companys 20,007 shares. Additionally, he loaned the company 10,000. Unfortunately, subsequent years became unfavorable for the business thus causing massive loses for the company. The government, which was the companys major customer, withdrew its tender thereby leading to a massive decline of the companys revenue. The company so began defaulting on the 10,000 debenture it owed Salmon. Half of the debenture belonged to Broderip who the sued the company thus forcing the government to put the company downstairs liquidation. The company paid Broderip his 5,000 but this left the company at an unstable position since it could not allowance the other unsecured creditors.The company failed to reimburse the unsecured creditors. The liquidator concluded that the government should not find the floating charge. Such an action would make Salmon personally responsible for the debt. Salmon contested the decision in court thus instigating a lengthy court battle that would reform the countrys company law.At the end of the length court cases that ended up at the House of Lords, the lawmakers appreciated the fact that a company is ind ependent and therefore a separate legal entity. In cases