A company is a separate legal entity from its owners. This principle came from:

**The reasoning** The principle that **a company is a separate legal entity** — meaning it can own property, sue, be sued, and exist independently from its owners — comes from the landmark case **Salomon v Salomon & Co Ltd (1897)**. In this case, Mr. Salomon created a company and sold his business to it. When the company failed, creditors argued he should be personally liable. The House of Lords ruled NO — the company was a completely separate "person" in law, even though Salomon owned almost all the shares. This established the **doctrine of corporate personality** and the **veil of incorporation**, protecting owners from personal liability for company debts. **Why the wrong options tempt you** - **Donoghue v Stevenson** — Famous tort case about negligence (the snail in ginger beer). Nothing to do with companies. - **Carlill v Carbolic** — Contract law case about offer and acceptance. - **Rylands v Fletcher** — Tort case about strict liability for dangerous things escaping your land. These are all major cases you'll study, so they *look* familiar and credible — but they're different areas of law entirely. **Quick takeaway** **Salomon = Separate legal entity.** When you see "corporate personality" or "veil of incorporation," think Salomon immediately.