The rule in Salomon v Salomon & Co [1897] AC 22 has been described as Essay - 5

The rule in Salomon v Salomon & Co [1897] AC 22 has been described as one of the corner stones of English Company Law. Discuss the rationale and impact of the decision on company law - Essay Example However, this paper argues that such balance has positive implications. The House of Lords decision in the case was good. At various general levels, Salomons case had universal recognition of the authority and principle where corporations were separate legal entities. Cases of this nature had firm establishment of incorporation, and new as well as separate artificial entities came to existence. From a legal perspective, corporations are distinct persons that have their personality independent of and distinct from the persons forming it, invested money in it, and directed and managed the operations (Mäntysaari, 2006, p 34). The identity that corporations are separate legal entities in their right forms grounds for modern corporate law such as in Department of Trade and Industry v MacLaine Watson & Co Ltd.

 rule in Salomon v Salomon & Co [1897] AC 22 has been described as Essay - 5