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

Discuss the rationale and impact of the decision on political party natural law - Essay ExampleThe case and its subsequent ruling were significant in informing successive laws that would help mitigate on the numerous dispute arising from communication channel 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 happy shoe manufacturing in the United Kingdom. The boot manufacturing business was a major success and so 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 b usiness thus causing massive loses for the company. The government, which was the companys major customer, withdrew its hearer thereby leading to a massive decline of the companys revenue. The company therefore 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 under liquidation. The company paid Broderip his 5,000 but this left the company at an unstable position since it could not pay the former(a) unsecured creditors.The company failed to reimburse the unsecured creditors. The liquidator concluded that the government should not honor 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 co mpany is independent and therefore a separate legal entity. In cases