C3 The nature of legal personality
3.1 Corporate personality
企业人格
1) Corporate personality refers to the fact that, as far as the law is concerned, a company really
exists.
一个公司是有自己的企业人格 公司就像一个人一样 他是真的存在的
2) This means that a company can sue and be sued in its own name, hold its own property and –
crucially – be liable for its own debts.
可以告人或者被告 可以拥有产业 可以自己欠债
3) It is this concept that allows limited liability for shareholders as the debts belong to the legal
entity of the company and not to the shareholders in that company.
Sh 的 liability 有限 因为 debt 都是属于公司罢了 不用 Sh 来
The history of corporate personality
1) Corporate legal personality arose from the activities of organisations, such as religious orders
and local authorities, which were granted rights by the government to hold property, sue and be
sued in their own right and not to have to rely on the rights of the members behind the
organisation.
是比如以前 gov 给 宗教和 local authorities hold property 的权利，告人和被告，
就是以前可能 property 就可以以教会的名字拥有 你们要告也是告教会 不是告 control 教会的人
2) Over time the concept began to be applied to commercial ventures with a public interest
element, such as rail building ventures and colonial trading businesses.
随着时间的推移，这一概念开始适用于具有公共利益因素的商业投资，如铁路建筑企业和殖民地贸易业
务。
3) However, modern company law only began in the mid-nineteenth century when a series of
Companies Acts were passed which allowed ordinary individuals to form registered companies with
limited liability.
然而，现代公司法仅在十九世纪中叶开始，当时通过了一系列“公司法”，允许普通人成立有限责任公
司。
4) The way in which corporate personality and limited liability link together is best expressed by
examining the key cases.
这两个事情很大关联的 就是因为有公司人格所以才有 Limited liability!
3.2 Salomon v Salomon & Co
1) It was fairly clear that the mid-19th century Companies Acts intended the virtues of corporate
personality and limited liability to be conferred on medium to large commercial ventures.
Companies Act 想把 LL 和 CP 的优点给中大型企业
2) To ensure this was the case there was a requirement that there be at least seven members of
the company.This was thought to exclude sole traders and small partnerships from utilising
corporate personality. However, as we will see below in the case of Salomon v Salomon & Co [1897]
AC 22, this assumption proved to be mistaken.
因为 LL 和 CP 可能会被滥用 就是一个 sole trader 或者 partnership 假假 form 一个公司 然后可以得到
LL 的好处 但是其实 company 只是 act like agent，全部 control 和真正的内部还是跟回不是 company
的做法
为了避免这个问题 CA*要求要至少七个 member 就是真正是脱离以前的 Sole Trader 还是 partnership
的格式了的
CA*以为这样可以防止别人滥用 但是他们想错了 看 Salomon 就知道了!!!
4) Mr Salomon carried on a business as a leather merchant.
一开始 Salomon 先生是作为皮革商人开展业务[sole trader]
5) In 1892 he formed the company Salomon & Co Ltd. Mr Salomon, his wife and five of his children
held one share each in the company.
他之后成立 Salomon & Co 成员是老婆和五个孩子== 哈哈哈还好你的孩子够多==!!!
6) The members of the family held the shares for Mr Salomon because the Companies Acts
required at that time that there be seven shareholders.
因为 CA*讲要 7 个人 所以 Salomon 的家庭成员就帮忙 Salomon held 那个 share
7) Mr Salomon was also the managing director of the company.
Salomon 先生也是公司的董事总经理
8) The newly incorporated company purchased the sole trading leather business.
Salomon&Co 是自己一个人嘛 买了 Salomon 的 sole trader 生意
9 The leather business was valued by Mr Salomon at £39,000.
==哇还要人格分裂一下 Salomon 的 sole trader 生意值 39K
10 This was not an attempt at a fair valuation; rather it represented Mr Salomon’s confidence in
the continued success of the business.
这不是公平的 valuation 估高价了!! 但是这是因为 Mr Salomon 觉得有信心之后可以很成功所以才卖这
么高哈哈!
11 The price was paid in £10,000 worth of debentures (a debenture is a written acknowledgement
of debt like a mortgage – see Chapter 7) giving a charge over all the company’s assets (this means
the debt is secured over the company’s assets and Mr Salomon could, if he is not repaid his debt,
take the company’s assets and sell them to get his money back), plus £20,000 in £1 shares and
£9,000 cash.
Debenture 就是你给我们钱 我给你 debenture 然后我会给你利息 公司有事 无担保债权是直接泡汤了
的~~~什么都拿不回 有担保的话就是会给你 assets 弥补
所以这里是有担保的
所以 Salomon&Co 用 10,000 的 debenture+20k 的 share+9000cash 买了 Salomon 的 sole trader 生
意
12 Mr Salomon also at this point paid off all the sole trading business creditors in full. Mr Salomon
thus held 20,001 shares in the company, with his family holding the six remaining shares.
Salomon 还清债务给全部的 creditors. 然后拥有 20K 的 share 其他的都是家人拥有
13 He was also, because of the debenture, a secured creditor.
他也是因为债权证，是一个有担保债权人。
14 However, things did not go well for the leather business and within a year Mr Salomon had to
sell his debenture to save the business.
然而，皮革业务的情况并不顺利，而在一年内，Salomon 不得不出售其债权以挽救业务。
15 This did not have the desired effect and the company was placed in insolvent liquidation (i.e. it
had too little money to pay its debts) and a liquidator was appointed (a court-appointed official
who sells off the remaining assets and distributes the proceeds to those who are owed money by
the company – see Chapter 16)
这没有预期的效果，公司被清算为无力偿债（即没有足够的钱来偿还债务），并且被任命了一名清盘人
（一名由法院任命的官员出售剩余的资产并将收益分配给那些由公司欠钱的人 - 见第 16 章）
16 The liquidator alleged that the company was but a sham and a mere ‘alias’ or agent for Mr
Salomon and that Mr Salomon was therefore personally liable for the debts of the company.
清盘人员指称，该公司对于 Salomon 而言只是一个假的，只是一个“别名”或代理人，因此 Salomon
因此对公司的债务负个人责任。
17 The Court of Appeal agreed, finding that the shareholders had to be a bona fide association
who intended to go into business and not just hold shares to comply with the Companies Acts.
CA 同意 SH 必须是 几个人然后是真正的想加入这个生意 不是这样随随便便为了凑 7 个人就可以的
18 The House of Lords disagreed and found that:
· the fact that some of the shareholders were only holding shares as a technicality was
irrelevant; the registration procedure could be used by an individual to carry on what was in effect
a one-man business
HOL 反对 CA 的看法 觉得一个 SH 只是这样 hold 着 其实也是帮别人 hold 这些都无关紧要 你要拿这些
share 来做么 因为怎么样才有这些 share 我们也不 care!
而且注册公司的过程是可以被 individual 用来经营 one man business 的. 就是给一个人操控是可以的!
· a company formed in compliance with the regulations of the Companies Acts is a separate
person and not the agent or trustee of its controller. As a result, the debts of the company were
its own and not those of the members. The members’ liability was limited to the amount prescribed
in the Companies Act (i.e. the amount they invested).
根据“公司法”规定成立的公司是独立的人，而不是其控制人的代理人或受托人。因此，公司的债务是
自己的，而不是成员的债务。成员的责任仅限于“公司法”规定的金额（即其投资金额）。
SH 只会损失自己投资的金额不会损失多过这个!!!
19 The decision also confirmed that the use of debentures instead of shares can further protect
investors.
用有保障的 debenture 比 share 还可以更保护 investor!
Activity 3.1 Read Salomon v Salomon & Co [1897] AC 22.
a. Describe the key effects of the change in status from a sole trader to a limited company for
Mr Salomon.
·Mr Salomon’s personal liability for the debts of the business had changed completely from
unlimited liability as a sole trader to limited liability as a shareholder in the company.
·Not only was Mr Salomon not liable for the debts of the company but he had also, as managing
director of the company granted himself a secured charge over all the company’s assets.
·As a result if the company failed not only would Mr Salomon have no liability for the debts of
the company but whatever assets were left would be claimed by him to pay off the company’s debt
to him.
从一个 sole trader 转变去 limited company 的 effect 1 limited liability 2 他自己作为公司的 managing
director 给自己一个 secured debenture 公司有事倒了 他可以先拿到 asset pay 回自己 wow!
b. What are the key principles that we can draw from the case?
·There is really one central principle we can draw and two minor ones. 1 大 2 小
· The central principle is that the company is a separate legal personality from its members and
therefore legally liable for its debts.
·This brings us to the minor principles.
·The first being that once the technicalities of the Companies Act are complied with, a one
person company can have the benefits of corporate legal personality and limited liability.
·The second is that debentures can be used effectively to further shield investors from losses.
大: 公司有 SLE ,legally liable for its debts
小 1: 只要 techinically 符合 CA*要的 7 人条件 一个人控制的公司也可以享有 LL 和 CP 的好处 不算诈骗
小 2: Debenture 可以保护投资者免损失~~~
c. Should Mr Salomon have been liable for the debts of the company? S 应该为公司的 debt 负责吗
·This is really a matter of your own personal opinion.
·It is useful, however, to work out what you think about this issue as it will help you deal with
other areas of company law where the Salomon decision has implications.
我觉得不该负责 因为 Salomon 自己的 sole trader 也是不容易 转换为 company
就只是一个有 CP 的”company”跟 Salomon 买下他长期辛苦经营的生意罢了 没有什么错 我看法和 HOL
一样
至于 debenture 方面他是 secured creditor ，其他 unsecured creditor 可能觉得这样不公平
但是那些 unsecured creditor 作为 creditor 决定跟 Salomon& Co 合作的时候就该知道 secured
creditor 可以拿这个东西先了 不是等事情发生了 才觉得不公平 根本就公平!!!
3.3 Other cases illustrating the Salomon principle
In Lonrho v Shell, [for SUB & parent]
there is another example of the application of the Salomon principle. In this case, Lonrho sought
discovery of documents held by a subsidiary of Shell Petroleum in Southern Africa. The HOL held
that the order of discovery did not extend to the subsidiary, since this was a separate company.
3.3.1 Macaura 【人和公司】
Macaura v Northern Assurance Co [1925] AC 619
3 Mr Macaura owned an estate and some timber.
Macaura 先生拥有一个庄园和一些木材
4 He agreed to sell all the timber on the estate in return for the entire issued share capital of
Irish Canadian Saw Mills Ltd.
他拿他的全部木材 卖给 Irish Candian Saw Mills Ltd 然后他没有拿钱 是拿 share capital
就是 Macaura 有这个公司的股权了现在
5 The timber, which amounted to almost the entire assets of the company, was then stored on
the estate.
相当于公司几乎整个资产的木材 然后存放在房地产上
6 On 6 February 1922 Mr Macaura insured the timber in his own name. Two weeks later a fire
destroyed all the timber on the estate.
1922 年 2 月 6 日，Macaura 先生以自己的名义投保了木材。两个星期后，一场火灾毁灭了庄园的所有
木材。
7 Mr Macaura tried to claim under the insurance policy.
Macaura 先生试图根据保险单要求赔偿。
8 The insurance company refused to pay out arguing that he had no insurable interest in the
timber as the timber belonged to the company.
保险公司拒绝支付，认为木材属于公司，对木材没有保险利益。
9 Allegations of fraud were also made against Mr Macaura but never proven.
也针对 Macaura 先生提出了欺诈指控，但从未证明过.
公司也是 sue Macaura 诈欺把 木材烧掉了 公司的 asset 没了~又没得赔~
10 Eventually in 1925 the issue arrived before the House of Lords who found that:
·the timber belonged to the company and not Mr Macaura
·Mr Macaura, even though he owned all the shares in the company, had no insurable interest in
the property of the company
·just as corporate personality facilitates limited liability by having the debts belong to the
corporation and not the members, it also means that the company’s assets belong to it and not to
the shareholders.
`木材属于公司，而不是 Macaura 先生
`Macaura 先生虽然拥有公司所有的股份，但对该公司的财产没有保险利益
`正如公司人格通过将债务归属于公司而不是成员来促进有限责任的，也意味着公司的资产属于公司而
不是股东。
>> 你要拿到 debt 是公司的这个原则 那么 asset 也是公司的
Debt 方面属于有 CP 的公司 那么 asset 也是如此 你和公司不属于同个人 就算公司全部股份都是你的
11 More modern examples of the Salomon principle and the Macaura problem can be seen in cases
such as Barings plc (In Liquidation) v Coopers & Lybrand (No 4) [2002]
·In that case a loss suffered by a parent company as a result of a loss at its subsidiary (a company
in which it held all the shares) was not actionable by the parent – the subsidiary was the proper
plaintiff.
Parent 公司是 parent sub 是 sub 我们是不同的两个人 sub 弄到 parent 损失 parent 也不能告
Sub 先告 parent parent 反告把在这个 case
结 论 =In essence you can’t have it both ways – limited liability has huge advantages for
shareholders but it also means that the company is a separate legal entity with its own property,
rights and obligations
(see also Giles v Rhind [2003] Shaker v Al-Bedrawi [2003] and Hashem v Shayif [2008]
重点就是 你不可能拿完全部好处 就是对你好的时候 你就讲这个方式 对你不好的时候 你就讲那个方式
不可以这样子
你要拿到 LL 的好处 完全是因为 SLE 这个 features
And then 这个 features 会带来对你不好的可能就是 rights assets property 都是属于公司一个人的
所以 Macaura claim 不到保险~~~
3.3.2 Lee
Lee v Lee’s Air Farming [1961] 【人和公司】
2 Mr Lee incorporated a company, Lee’s Air Farming Ltd, in August 1954 in which he owned all the
shares. Mr Lee was also the sole ‘Governing Director’ for life.
李先生于一九五四年八月成立一家公司李氏航空农业有限公司，其中拥有全部股份。李先生也是唯一的
“领导人”。
3Thus, as with Mr Salomon, he was in essence a sole trader who now operated through a
corporation.
因此，与 Salomon 先生一样，他本质上是一个唯一的经营者，现在通过一家公司经营。
4 Mr Lee was also employed as chief pilot of the company.
李先生也被任命为公司的首席执行官
5 In March, 1956, while Mr Lee was working, the company plane he was flying stalled and crashed.
在 1956 年 3 月，李先生在工作时，公司飞机 stop working，坠毁。
6 Mr Lee was killed in the crash leaving a widow and four infant children.
李先生在遇难中丧生离开一名寡妇和四名婴儿。
7 The company, as part of its statutory obligations, had been paying an insurance policy to cover
claims brought under the Workers’ Compensation Act.
一个公司有 statutory obligation 一定要买保险来保员工的命
8 The widow claimed she was entitled to compensation under the Act as the widow of a ‘worker’.
寡妇声称她有权根据该法作为“工人”的寡妇获得赔偿。
9 The issue went first to the New Zealand Court of Appeal who found that he was not a ‘worker’
within the meaning of the Act and so no compensation was payable. The case was appealed to the
Privy Council in London.
问题首先提交给新西兰上诉法院，他发现他不是该法案所指的“工人”，所以不需要赔偿。该案曾向伦
敦枢密院提出上诉。
10 They found that:
· the company and Mr Lee were distinct legal entities and therefore capable of entering into
legal relations with one another
· as such they had entered into a contractual relationship for him to be employed as the chief
pilot of the company
· he could in his role of Governing Director give himself orders as chief pilot. It was therefore
a master and servant relationship and as such he fitted the definition of ‘worker’ under the Act.
The widow was therefore entitled to compensation.
•公司和李先生是不同的法人，因此能够相互达成法律关系
•因此，他们已经订立了合同关系，被聘为公司的首席飞行员
•他可以担任领导干部的职务，自己作为首席飞行员。因此，它是一个主人和仆人的关系，因此，他将
“工人”的定义符合该法案。因此，遗 therefore 有权获得赔偿。
Activity 3.2
Read Macaura v Northern Assurance Co [1925] and Lee v Lee’s Air Farming [1961] carefully and
then write a brief 300-word summary of each case. Re-read Dignam and Lowry, Chapter 2, paras
2.2–2.12 and paras 2.32–2.45.
The key point here for your further understanding is that a share is in no way are presentation
of the fractional value of the company’s property. The company as a separate legal entity owns its
own property and there is no legal connection between a share in the company and the company’s
property. That is the case even where (as in Macaura and Lee) the shareholder owns all the shares.
Shareholders generally benefit from this (although not Mr Macaura) because it facilitates limited
liability as the company also owns its own debts (see also Woolfson v Strathclyde Regional Council
[1978] SC 90).
结论你拥有全部的 share 也不代表公司的 asset 是你的 asset 是公司一个人的 SLE 不关系到背后拥有
股份还是 control 的人 company 的 property 不会有 fractional value! Sh 一般都是从 SLE 拿到好处除
了 Macaura!
3.4 Limited liability
1 As we showed above, separate legal personality and limited liability are not the same thing.
如上所述，单独的法人资格 SLE 和有 LL 限责任是不一样的。
2 Limited liability is the logical consequence of the existence of a separate personality.
有限责任是单独个性存在的逻辑后果。
LSE 和 LL 不一样的两个事情 因为有 LSE 所以才有 LL 这个东西
3 The legal existence of a company (corporation) means it can be responsible for its own debts.
公司（法人）的合法存在意味着可以自己负债。
4 The shareholders will lose their initial investment in the company but they will not be responsible
for the debts of the company.
股东将丧失对公司的初始投资，但不对公司的债务负责。
5 Just as humans can have restrictions imposed on their legal personality (as with children, for
example), a company can have legal personality without limited liability if that is how it is
conferred by the statute.
正如人类可以对其法律人格施加限制（例如与儿童一样），如果法律规定如此，公司可以具有法人资
格，没有有限责任。
小孩子可能有 legal personality 但是是有 restriction 的 可能不能坐牢之类的
如果法律讲 company 的 liabilty 没有 limit 那就是没有 limit
6 A company may still be formed today without limited liability as a registered unlimited company
(s.3(4) CA 2006).
公司今天仍可能成为无限责任公司
有 limited 的 company 和 unlimited 的 company
Summary
There are some key points to take from this chapter.
First, it is important at this stage that you grasp the concept of corporate personality. If at this
stage you do not, then take some time to think about it and when you are ready come back and reread Dignam and Lowry, Chapter 2, paras 2.2–2.12.
Second, having grasped the concept of corporate personality you also need to understand its
consequences (i.e. the fact that the company can hold its own property and be responsible for its
own debts).
Useful further reading
¢ Ireland, P. et al. ‘The conceptual foundations of modern company law’ (1987) 14 JLS 149–65.
¢ Pettit, B. ‘Limited liability – a principle for the 21st century’ (1995) CLP 124.
¢ Grantham, R.B. and E.F. Rickett ‘The bootmaker’s legacy to company law doctrine’ in Grantham,
R.B. and E.F. Rickett (eds) Corporate personality in the 20th century. (Oxford: Hart Publishing,
1998) [ISBN 9781901362831].
¢ Davies and Worthington, Chapter 2: ‘Advantages and disadvantages of incorporation’ and
Chapter 8: ‘Limited liability and lifting the veil at common law’.
Sample examination question
‘The Salomon decision was a scandalous one which unleashed a tidal wave of irresponsibility into
the business community.’ Discuss.
Salomon 的决定是一个丑闻，给商界带来了不负责任的浪潮。”讨论
Advice on answering this question
Start by setting out your position on this provocative 挑衅 statement. Do you agree with it or not?
Either way you must take a position and argue it consistently.
There are two parts to the statement –
(1) is it scandalous? And
1 是丑闻吗?
(2) did it unleash a ‘tidal wave of irresponsibility’? 2 有照成不负责任的潮流?
Make sure you address the points separately and tie them together in your conclusion.
Go through the facts of Salomon with particular emphasis on the aspects of the case that might
be scandalous (i.e. Mr Salomon’s evasion of personal liability for the debts of his one man company
and his over-valuation of the business).
Discuss whether a ‘tidal wave of irresponsibility’ was unleashed into the business community.
Points to make here are that creditors may lose out but investment and management risk-taking
is facilitated.
债权人可能会亏损，但投资和管理风险方便了。
Salomon 的好处坏处类似