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In Lee v. Lee's Air Farming Ltd., (1961) A.C. 12, the Privy Council held that:
Answer & Solution
Correct answer: C.
1. Lesson 1 reproduces the facts: Lee held all but one share, voted himself MD, appointed himself chief pilot, was killed in a crash on duty.
2. The Privy Council held that Lee and his company were "distinct legal persons" who could enter into contractual relationships under which he became chief pilot, a servant of the company.
3. "The magic of corporate personality enabled him to be the master and servant at the same time and enjoy the advantages of both."
4. His widow was held entitled to compensation, vindicating the corporate-personality principle laid down in Salomon.
_Source: ICSI CS Executive Paper 2 (Company Law) — Lesson 1: Introduction to Company Law, pp. 2-35._
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