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This separation of a company from its members was established in the House of Lords in the famous case. Salomon had a boot manufacturing business which he decided to incorporate into a private limited company.He sold his business to the newly formed company, A Salomon & Co Ltd, and took his payment by shares and a debenture or debt of £10,000.

This is how corporations may sue and be sued, and their assets are tracked separately.

The plaintiff, who was the major shareholder and managing director of the company, sought to conduct the company’s defence.

The court held that while a human person can represent him or herself in court, a legal person such as a company can only be represented by a solicitor or barrister.

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