Section A

Which landmark case firmly established the principle that a company is a separate legal entity distinct from its shareholders?

Answer options:

Carlill v Carbolic Smoke Ball Co

Donoghue v Stevenson

Salomon v A Salomon & Co Ltd

Caparo Industries plc v Dickman

How to approach this question

Recall the foundational case of UK company law.

Full Answer

C.Salomon v A Salomon & Co Ltd✓ Correct

Salomon v A Salomon & Co Ltd (1897) is the foundational case of UK company law, establishing that upon incorporation, a company becomes a separate legal person, distinct from its members and directors.

Common mistakes

Forgetting the name of this essential case.

Question 33 All questions Question 35

Practice the full ACCA LW — Corporate and Business Law Practice Exam 5

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