Discuss the implications of the writer’s argument to company formation and the implications in relation to the twin concepts of Separate Corporate Personality and Limited Liability
Question: “in this country as elsewhere company law has, to a large extent, changed it’s economic and social function. The privileges of incorporation and of limited liability were originally granted in order to enable a number of capitalists to embark upon risky adventures without shouldering the burden of personal liability. there was, in the second half of the 19th century, a definite commercial need for those measures, which the various companies Act introduced. However, owing to the ease with which companies can be formed in this country, and owing to the rigidity with which the courts applied the corporate entity concept ever since the calamitous decision in Salomon v Salomon Co Ltd, a single trader or a group of traders are almost tempted by the law to conduct their business in a form of a limited company, even where no particular business risk is involved, and where no outside capital is required…the metaphysical separation between a man in his individual capacity and his capacity as a one-man-company can be used to defraud his creditors who are exposed to grave injury owing to the timidity of the Courts and of the Companies Act” Discuss the implications of the writer’s argument to company formation and the implications in relation to the twin concepts of Separate Corporate Personality and Limited Liability O. Kahn-Freund 919940 ‘ Some Reflections on Company Law Reform’ The Modern Law Review, Vol. 7, No. 1/2 (1994), pp54-66 REFERENCE FORMAT IS OSCOLA PLEASE USE AT LEAST 8 REFERENCES INCLUDING CASES (newer 2012 to date) The focus is on the UK
