Second the progression of psychology such as development, motivation, and maturation will be discussed. V State of Bihar, the petition was filed by the company and some shareholders also joined it. The property owned by the juristic proponent cannot be part or owned by anybody, but this may be implemented and legally bounded by certain criteria. They found that: the company and Mr Lee were distinct legal entities and therefore capable of entering into legal relations with one another as such they had entered into a contractual relationship for him to be employed as the chief pilot of the company he could in his role of Governing Director give himself order as chief pilot. Originally, the outward form that corporate bodies are fictitious personality was directed at ecclesiastic bodies. The view of self is important because it is how an individual sees themselves. It declared that only human beings can be a person and have rights.
The Common Law Perspectives Generally, there are two types of person which the law recognized, namely the natural and artificial person. So corporation has its own real psychic will, therefore it is not fictitious or imaginary instead it is a real personality recognized by law. More modern examples of the Salomon principle and the Macaura problem can be seen in cases such as Barings Plc In Liquidation v Coopers ; Lybrand No. Legal scholars, particularly the jurists, have always explored the issue on the recognition of corporation as a legal person. He holds that fictitious personality is not an addition to the class of persons, but is only a matter of owning or possessing property in common. Mr Macaura tried to claim under theinsurance policy.
Individual sections weren't available on India Kanoon. It does not come to end with the death of its individual members and therefore, has a perpetual existence. Unlike under the contract theory, however, the shareholders are seen more as investors in the corporation than owners of it. In law the word includes natural person and artificial persons like corporation and joint stock companies, but it does not include a State or Government, for although a state is a moral person, having an understanding and a will, capable of possessing and acquiring rights and of directing and fulfilling obligations, the state in its political organization is entirely different and distinct from the inhabitants who may happen to reside there. But laws might be fashioned to give corporations the same power to own property and sign valid contracts without terming them persons. This theory is somewhat similar to the fiction theory in which human involvement is needed and it also asserts that only human beings are subjected to legal rights and certain obligations According to Ihering, the concept of corporate personality is essential because it is that instrument which makes any objective clear and less complicated.
According to Gierke, Corporation is a real but mysterious entity, every group has a real mind, a real will and real power of action. Consequently instead of teaching that we have two kinds of ownership, it is taught that there are two kinds of persons. The members of the family held the shares for Mr Salomon because the Companies Acts required at that time that there be seven shareholders. The weakness of this theory lies in the fact that it is unable to indicate when the bracket may be removed and the mask lifted for the purpose of taking note of the members constituting the corporation. In this perspective, the company is viewed as social organism and the humans are the physical organism. It is this concept that enables limited liability for shareholders to occur as the debts belong to the legal entity of the company and not to the shareholders in that company.
Though there is no doubt that the Salomon case had play a significant role in company law, the decision in this case was hardly the origin of the separate legal entity principle. To determine, however, the real nature of the corporation and its state of affairs, the brackets have to be removed, for the names of the members of the corporation are kept in brackets. It is most commonly asked as an essay question on either the principle of separate corporate personality or the circumstances in which the veil of incorporation will be lifted. These theories could be either political which talks about the relationship between the state and group residing within the state or it could be a philosophical explanation which is pertaining to existence of those persons which are created by law. It thus refers both to the individual who has died and to the Corporation sole which survives, i. As such corporate statutes typically give corporations the ability to own property, sign binding contracts, pay taxes in a capacity that is separate from that of its shareholders. To know the actual nature and state of the corporation, the brackets have to be removed and names of members are kept in brackets.
According to another theory regarding personality of the corporation, a corporation has a real and not a fictitious, personality. A short discussion on effect of registration of a company, as mentioned in Sec 9 of the companies act 2013. Incorporated companies exist independently autonomous from its original promoters and the people who are in directorship. Majority of the principal jurisprudence theories on corporate personality contended that the legal entity of the corporation is artificial. Kelsen shows that there is no significant difference between the legal personality of an individual and that of corporation, for in the case of both what is known as legal personality is nothing but a complex of norms, that is to say, what is constituted by the bundle of rights and duties and liabilities centering round, and the norms which rule the behavior of individuals are also the norms that determine the rights and duties of corporations. A corporation therefore, has a real existence, irrespective of the fact whether it is recognized by the State or not.
According to this theory, the personality of a corporation is different from that of its members. That is, the personification of the corporation leads lawyers to indiscriminately apply concepts to it which are rightly applicable only to natural persons. As a result of this, a company can sue and be sued in its own name, hold its own property and crucially — be liable for its own debts. Wolf said that there are three advantages of this theory. Just as humans can have restrictions imposed on their legal personality as in the case of children a company can have legal personality without limited liability if that is how it is conferred by the statute. The jurisprudence theories on juristic person had been established since the early Roman law to justify the existence of legal person other than the human. Over time the concept began to be applied to commercial ventures with a public interest element such as rail building ventures and colonial trading businesses.
Hence this theory states that aggregate personality has similar features as a human personality. There is therefore no reason why the types of bodies if any which deserve to be endowed with collective rights should coincide with those organisations allotted the status of persons by the law for purely instrumental reasons. The insurance company refused to pay outarguing that he had no insurable interest in the timber as the timber belonged to the company. Referring to the English company law case law, it can be seen that in most cases, the court adopted the fiction theory. Mr Lee was also employed as chief pilot of the company. Their basis of adopting of the theory was the important notation from Lord Halsbury about whether the synthetic conception of the parliament had been guided by the constitution. According to this theory, the legal personality of entities other than human beings is the result of a fiction.
Dispositional theorists are more focus on the personality traits of an individual, on what makes them unique. Also, gives a highlight with the law that it should look clearly on the matters of the state. It is composed of one person only who is incorporated by law. Mr Salomon also at this point paid off all the sole trading business creditors in full. This theory was raised by Jhering and further studied and conceptualized by Marquis de Vareilles-Sommieres. While in the case of a natural person, he is born with a personality which the law has merely to recognize, it is otherwise in the case of an artificial or juridical person whose personality is created by the law there being no personality apart from this fictitious creation by the law.
Many prominent theorists developed stage theories to describe various steps and stages that occur on the path of personality development. The realist theory asserts that group personality has the same features as a human personality. Facebook 0 Twitter 0 Google+ 0 Viber WhatsApp Theories of Corporate Personality Corporate personality is the recognized idea with the accordance in law that a company is interpreted and known to be an existing single legal entity on its own as it can stand alone away from division of its body members. The State, religious bodies and education institutions had long been recognized as having legal entity distinct from the members. The original concept of personality must coincide with the idea of man. Macaura v Northern Assurance Co. It is concession or grant from the side of law that legal personality is created and recognized.