Suing and being sued, Business Law and Ethics

Suing and being Sued:

           Because a company is at law a different person altogether from its members it follows that a wrong to, or by, the company does not legally constitute a wrong to, or by, the company's members. Consequently:

(a)     A member or members cannot institute legal proceedings to redress a wrong to the company. The company as the injured party is, generally speaking,the proper plaintiff. This is illustrated by the facts of, and the decision in, Foss v Harbottle (6).

(b)     A member cannot be sued to redress a wrong by the company. This is illustrated by Salomon v Salomon& Co Ltd (3) in which it was held that Salomon was not liable for the company's debts and should not therefore have been sued to recover them.

Posted Date: 1/12/2013 2:04:04 AM | Location : United States

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