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These are the exceptions to the rule in Salomon’s Case, when the corporate veil is lifted and the reality of the situation is examined.It was held that As soon as citizens form a company, the rights guaranteed to them by article 19(1)c has been exercised and no restraint has been placed on the right and no infringement of that right is made.If a corporation is sued, then the owners will not have their personal belongings at risk unless those belongings were purchased with illegal returns from the corporation.In a sole proprietorship or partnership, the owners personally liable.

In other words, if a corporation, in the course of doing business, is involved in any legal action, then the corporation, for legal purposes, is its own person.

The principle in Salomon’s Case that a company is a legally different person from those who control it represents the current law in Ireland.

For example, if I form a company called ‘Murphy & Co Ltd’ in which I own one hundred per cent of the shares and am a director and employee, legally speaking the company and myself are two distinct people.

Mr Salomon owned 20,000 £1 shares, and his wife and five children owned one share each.

Some years later the company went into liquidation, and Mr Salomon claimed to be entitled to be paid first as a secured debenture holder.




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