-Responsible for all assets and liabilities -Continues till it is registered, termination via liquidation, removal from the register(Salomon v Salomon & Co Ltd)
Features of a company: (Separate Legal Personality)
The statement refers to the legal concept of a “limited liability company,” which was established in the landmark case of Salomon v Salomon & Co Ltd. In this case, Mr. Salomon had incorporated his own business as a separate legal entity from himself, which meant that the company was responsible for all of its own assets and liabilities, rather than Mr. Salomon himself.
This principle of limited liability has become a fundamental feature of modern business law, and means that the owners of a company (known as “shareholders”) are not personally responsible for the debts or obligations of the business beyond the amount they have invested in it. This allows entrepreneurs and investors to start and grow businesses without putting their personal assets at risk.
However, the concept of limited liability is not absolute. In certain circumstances, such as instances of fraud or other illegal activities, the courts may “pierce the corporate veil” and hold individual shareholders or directors personally liable for the company’s debts.
In terms of the lifespan of a limited liability company, it can continue indefinitely until it is voluntarily dissolved (such as through liquidation or voluntary strike-off) or is struck off the register by the government for failing to comply with legal requirements.
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