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Some years later the company went into liquidation, and Mr Salomon claimed to be entitled to be paid first as a secured debenture holder.

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However, the House of Lords held that the company was a different legal person from the shareholders, and thus Mr Salomon, as a shareholder and creditor, was totally separate in law from the company A Salomon & Co Ltd.

The result was that Mr Salomon was entitled to be repaid the debt as the first secured creditor.

In this case, Mr Salomon was the major shareholder, a director, an employee and a creditor of the company he created.

It is quite common in Ireland for one person to have such a variety of roles and still be a different legal entity from the company. Lee formed his crop spraying business into a limited company in which he was director, shareholder and employee. Lee was self-employed and thus not covered by the legislation. Lee and the company he had formed were separate entities, and it was possible for Mr. The following case is similar to Salomon and Lee, but the principle of separate personality worked to the disadvantage of the plaintiff.

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