Almost all candidates identied that once registered a company becomes a separate legal entityr and is distinguished from the shareholders. Majority of candidates also discussed the importance of the Salomon case in developing this legal principle. Candidates who get higher marks for the first part of the question were able to discuss that commercial companies developed as a means of allowing a number of people to pool their resources to undertake an enterprise too large for a single individual. Creating a separate legal person to hold and incur the rights and obligations of the enterprise simplied dealings between the entemrise and those with whom it conducted business. While most candidates mentioned that the major advantage of forming a company is limited liability yet those who got lower marks did not go on to elaborate the meaning of limited liability