Company law - Essay Example It implies that if somebody starts a business as a limited liability company, the company is regarded as a legal entity with a separate legal personality, which signifies that a company is different from its owners, employees along with shareholders. This in turn assures the advantages of ‘corporate veil’ to the company, wherein the owners, employees and shareholders are directly charged with the damage claims or tort claims caused due to their misconduct or irresponsible conduct with the name of the company. The Salomon principle in this regard emphasises that a company only provides grounds for individuals to act in its behalf and thus, charges in lieu of the tort laws should be treated in a way that makes the decision makers directly, personally and professionally liable for the damages1. In this regard, it has often been argued and has subsequently been under stern arguments that the tort creditors of a subsidiary company holding limited liability shall be deemed as ineligible to obtain the benefits from Salomon principle.
