The Principle of Separate Corporate Personality

In the case of Salomon v Salomon & Co Ltd [1], since the principle of personality separation of the company has been decided, since the company has independent legal personality, rights and obligations under individual law, the personality principle of the independent company is common law It is stipulated. It is different from shareholders. However, in order to allow shareholders to be personally responsible for the company's responsibilities, laws and courts "open the veil of the company".

As the company is an independent corporation, its members personally do not take responsibility for their debts. This principle also applies to obligations other than debts such as members of the company but such independent legal personality does not necessarily protect it from individual responsibility to third parties and the management of the company thinking about. If a company bankrupts, the theoretical problem will change greatly, but that is not the case. The question is whether a liquidator acting on behalf of a company can ask for donations from members to bring in assets to the level necessary to meet the claims of the company's creditors.

If you want to separate your personal responsibilities from your company's responsibilities, you may want to consider forming one of several types of companies. As a result, the project becomes an independent entity other than its owner, and like other individuals, the business possesses property, is responsible, takes taxes, signs contracts, and can initiate a lawsuit. However, one of the most common structures for SMEs is the limited liability company (LLC). This hybrid structure has company legal protection while enabling tax incentives for partnership

The company is a corporation doing business. That is a separate entity from the one who made it. Just like anyone else, a company can do business for himself. If a person owns a part of the company, its responsibility is limited to ownership in the company. They can not lose more than investing in the company. If the owner decides that he no longer wants to share the company's shares, the company does not need to close. The unique feature of the company is that it allows you to transfer shares with the same difficulty and hassle that the owner transfers ownership of the partnership. There may be restrictions on how shareholders transfer ownership, but the fact that ownership can be transferred allows the company to continue when the owner wishes to make changes.