Investor Presentaiton
Salomon vs. Salomon & Co. Ltd. (1897) AC 22
• Salomon was a boot and shoe manufacturer who traded as a sole proprietor for
nearly 30 years.
Consequently, he incorporated a company and gave his wife and children 1 share
each in the company and kept the balance shares in his own name.
• As security for the shares in the company, Salomon obtained debentures from the
company.
Subsequently, the company went bankrupt. On the company's winding up it was
found that its remaining assets were insufficient to satisfy both its debenture
holders and its trade creditors.
• The question arose as to whether the debentures secured on assets issued to
Salomon will get preference as against the other unsecured debts of the company.View entire presentation