In Salomon v. Salomon & Co. Ltd, a manufacturer of boots and shoes, incorporated the defendant...

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In Salomon v. Salomon & Co. Ltd, a manufacturer of boots and shoes, incorporated the defendant company with registered capital of 40,000 to take over the business. The law required seven subscribers to the memorandum, and S, his wife and five children subscribed, taking one share each. S then sold his business, valued at over 39,000, to the company in return for 20,000 in fully paid shares, 10,000 in cash and 10,000 in debentures secured on the company's assets. When the company collapsed into insolvent liquidation, the liquidator claimed that S should indemnify the company's creditors. Did the company have a right of indemnity against S? In Salomon v. Salomon & Co. Ltd, a manufacturer of boots and shoes, incorporated the defendant company with registered capital of 40,000 to take over the business. The law required seven subscribers to the memorandum, and S, his wife and five children subscribed, taking one share each. S then sold his business, valued at over 39,000, to the company in return for 20,000 in fully paid shares, 10,000 in cash and 10,000 in debentures secured on the company's assets. When the company collapsed into insolvent liquidation, the liquidator claimed that S should indemnify the company's creditors. Did the company have a right of indemnity against S?

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The text in the image provided is discussing a landmark case in corporate law Salomon v Salomon Co L... View the full answer