Which landmark case firmly established the principle of separate corporate personality, confirming that a company is a distinct legal entity from its shareholders?

Answer options:

Carlill v Carbolic Smoke Ball Co

Salomon v A Salomon & Co Ltd

Caparo Industries plc v Dickman

Adams v Cape Industries plc

How to approach this question

Identify the foundational case of UK company law.

Full Answer

B.Salomon v A Salomon & Co Ltd✓ Correct

Salomon v A Salomon & Co Ltd (1897) is the cornerstone of UK company law. The House of Lords held that a company is a separate legal person from its members, even if one person holds almost all the shares and controls the company.

Common mistakes

Confusing Salomon with cases on lifting the veil (like Adams v Cape).

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Practice the full ACCA LW — Corporate and Business Law Practice Exam 4

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