Legal Entity Case Study

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Companies are enterprises, also the legal person, so companies are business entity. It’s also as the business entity, different with other non-business legal person in sociality, for example: Swansea University and Morrison Hospital. Company as business entity, the distinction with non-business legal person is business is profitable legal person; A company is an artificial person. Once it is incorporated by complying with the prescribed procedure, its come into being and is a separate legal entity from its members and officers. This principle distinguishes a company from a partnership. Besides of that, the importance of principles of separate legal entity was first established in the landmark case of Salmon v Salomon & Co Ltd (1897) and the principal of separate legal entity is also enshrined in section 16(5) of the Companies Act 1965. Additionally, the effect of corporate personality is to create a “veil of incorporation” between the shareholders and the company, preventing recourse to the shareholders for the debts of the company. By the way, given that it is impossible to envisa...

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