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12-Oct-2017 16:16

Mr Salomon owned 20,000 £1 shares, and his wife and five children owned one share each.

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He sold his business to the newly formed company, A Salomon & Co Ltd, and took his payment by shares and a debenture or debt of £10,000.

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