Corporate personality is the creation of law. The legal personality of the company is recognized in English and Indian law. A company is an artificial person who enjoys rights and obligations in legal capacity and holds property. A company is characterized by the reference to different types of things that the law selects for personification. The people who make up the corpus of the Society are called its members. The legal personality of companies presupposes the existence of three conditions:(1) There must be a group or set of persons linked to a specific purpose. (2) There must be organs through which society functions, and (3) Society is attributed by legal fiction. A company is different from its individual members[1]. The concept of legal entity is at the heart of Western law today, both in common law countries and in civil law countries, but it can also be found in virtually all legal systems.
[12] (due to its existence) are subject to enforceable legal obligations and liabilities. In general, a company has the ability to do both: Understanding how a court will approach the interpretation of a law to determine whether it requires a court to ignore the separate legal personality of a corporation Figure 3.5 Using a corporation to avoid an existing legal obligation. (a) declare that the corporation is considered a legal person with respect to any right, obligation or liability of the corporation or of a shareholder of the corporation or, in the case of a not-for-profit corporation, a member of the corporation or any other person referred to in the return; and shares may be allocated and issued by a company and purchased by a shareholder on a fully paid-up, partially paid-up or zero-pay basis. Shares are paid in full when the shareholder pays the full share price (the amount due to the company) to the company at the time of allocation. As long as the Company continues to carry on its activities, the Company does not have the legal right to require a shareholder with fully paid-up shares to pay further sums of money to the Company. This applies regardless of whether the company is a limited or unlimited liability company. In addition, a company is an artificial person created by law. He is not a human being, but he acts through humans. Companies are called legal entities because they can enter into a separate contract, or they can own real estate in their own name, sue and be sued by the other parties, etc. So many different characteristics that a company possesses throughout the process.
However, companies are called artificial people because they are immaterial, invisible and exist in the examination of the law. Companies may also enjoy rights and are well acquainted with performing other tasks. After selling his property (timber) to a company for shares, Macaura, the sole shareholder of Irish Canadian Sawmills Ltd, insured the timber against fire in his own name. The wood was destroyed by fire and Macaura claimed the insurance policy. Held: The property belonged to the company, not to the shareholder. Although the timber was destroyed by an insured event, Macaura had no insurable interest in the timber because “he had no `legal or equitable relationship` with it” and therefore could not recover under the insurance policy. Paragraph 2(1)(f) of the Citizenship Act, 1955 defines a corporation as not a citizen and does not include any corporation or association, whether registered or not. It is therefore clear from the law that a company cannot be a citizen.
In The State Trading Corporation v. Commercial Tax Officer (1963), the Court held that the word “citizen” can only refer to one natural person and nothing else. Therefore, a company cannot claim citizenship to invoke fundamental rights under the Indian Constitution. Since the 19th century, the legal entity has been interpreted in such a way as to make it a citizen, resident or resident of a state (usually for purposes of personal jurisdiction). In Louisville, C. & C.R. Co. v. Letson, 2 How.
497, 558, 11 L.Ed. 353 (1844), the U.S. Supreme Court has held that for the purposes of this case, an enterprise “is likely to be treated as a citizen [of the State that created it] in the same manner as a natural person.” Ten years later, they reaffirmed Letson`s conclusion, albeit on the slightly different theory that “those who use the company`s name and exercise the powers it confers” should be conclusively considered citizens of the company`s founding state. Marshall v. Baltimore & Ohio R. Co., 16 How. 314, 329, 14 L.Ed. 953 (1854). These concepts have been codified by law, as laws on U.S. jurisdiction specifically affect the headquarters of companies.
The answer to this question depends on whether the company in question is a limited liability company or an unlimited liability company. One area where difficulties have arisen, in particular, because businessmen have not recognized the “tyrannical influence” that the metaphor of business unity has on the courts is the insurance of corporate property. In a triad of business (Macaura (see below), General Accident v Midland Bank Ltd [1940] 2 KB 388 and Levinger v Licences etc Insurance Co (1936) 54 LL L Rep 68), insurance companies avoided paying under insurance contracts for which they received premiums because the insured property did not belong to the insured (the shareholder of the company). but rather through the company itself. It has its own legal personality and may bring and be sued in its own name. It does not end with the death of its individual members and therefore has an eternal existence. However, unlike natural persons, a company can only act through its agents. The law provides for a procedure for the dissolution of a company[2]. In addition, companies, banks, railways, universities, colleges, church, temple, hospitals, etc. also conferred legal personality.
The Union of India and the States are also recognised as legal or legal persons [3]. In some cases, the body of the legal person is a fund or estate that has reserved certain special uses. For example, a trust – the estate or estate of an insolvency administrator, a not-for-profit fund, etc.; are included in the expression “legal personality”. Companies are of two types:1. Aggregate of companies: Is an association of persons united for the purpose of transmitting their particular interests. A limited liability company is one of the best examples. Such a company is constituted by a number of persons who, as shareholders of the company, contribute to the capital of the company or promise to contribute to the capital of the company in order to promote a common goal. Their liability is limited to the extent of their participation in the Company.
A limited liability company is thus created by the personification of the shareholders. Ownership is not that of the shareholders, but its own property and assets and liabilities differ from those of its members. Shareholders are entitled to receive dividends from the company`s profits, but not from the company`s ownership.[4] The principle of the personality of a company was recognized in Saloman v. Saloman & Co[5]. 2. Single company: Is a registered number of consecutive persons. This is a single person who is personified and legally considered a legal person. In other words, a single person exercising a function or function acts in the exercise of legal capacity and has legal rights and obligations.
Only one company is indefinite. Post – Master-General, Public Trustee, Comptroller and Auditor General of India, the Crown in England etc. are some examples of corporate brine. In general, only public office holders are those who are legally recognized as a corporation. The main characteristic of a company alone is its “continuous unit, equipped with capacity for an infinite duration”. A company brine is an example of dual capacity. The purpose of a single company is similar to that of an aggregate of companies. In it, a single person holding public office occupies the function in a number of heirs, which means that with his death, property, rights and responsibilities, etc., they do not expire, but are transferred to the successor person.
Thus, in the event of the death of a company, only its natural personality is destroyed, but the legal personality is always represented by the next person. Therefore, the death of an undertaking alone does not adversely affect the interests of the general public. Advantages of incorporation1) Existence of an independent business: A legal entity must have an independent business existence. He is a person in the law. It is an independent legal entity that exists independently of its members. In the case of a company, the constitution confers on it a company personality distinct or distinct from its members. Ownership of the Society belongs to it and not to its members; he may bring or be sued in his own name; can independently conclude contracts with third parties and also the partners themselves can conclude a contract with the company In accordance with Article 34, paragraph 2, of the Companies Act, when issuing the certificate of incorporation, the drafters of the deed and other persons who may from time to time be the partners of the company are a legal person that is able to perform all the functions of a public limited company and a permanent succession and a co-union Having seals.