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•Salomon transferred his business of boot making, initially run as a sole proprietorship, to a company (Salomon Ltd.), incorporated with members comprising of himself and his family.

•The price for such transfer was paid to Salomon by way of shares, and debentures having a floating charge (security against debt) on the assets of the company.

•Later, when the company’s business failed and it went into liquidation, Salomon’s right of recovery

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