Why Is Legal Personality Important

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The fictitious theory of the corporation is said to have been promulgated by Pope Innocent IV (1243-1254). This theory is supported by many famous jurists, including Savigny and Salmond. According to this theory, the legal personality of entities other than humans is the result of fiction. Therefore, a company that is not a human being cannot be a real person and cannot have a personality of its own. Originally, the external form according to which societies are a fictitious personality was directed against ecclesiastical bodies. It was decided that, since the company had met the requirements of the Companies Act, it would become a legal entity independent and separate from its members. [14] This theory is also called the purpose of the theory of opportunism. Similar to fiction and concession theories, it explains that only humans can be a person and have rights. Other human entities are considered artificial persons and simply function as a legal means to protect or achieve a real purpose.[19] Since companies are not human beings, they can only be considered as legal or artificial persons.

According to this theory, the legal person is not a person at all, but simply as a “subjectless” good intended for a specific purpose and that there is a good but no owner. The legal person is not built around a group of people, but is based on object and purpose.[20] The ownership of the legal entity does not belong to anyone, but it can be dedicated and legally bound by certain objects. This theory has established the existence of many corporations or non-profit organizations, such as trade unions, which have been recognized as legal entities for certain purposes and have a continuous fund. It is also closely linked to the legal system, which treats the institution and the Foundation as legal persons. [21] While there is no doubt that Salomon played an important role in corporate law, the decision in this case is hardly at the origin of the principle of separate legal persons. The legal person of beings other than man was recognized well before 1897, when the Salomon case was decided. In a landmark 1949 case, the International Court of Justice (ICJ) concluded that IOs, in this case the United Nations (UN), could indeed have international legal personality and thus rights and obligations under international law. The ICJ held that the international legal personality of the United Nations derives from the Charter of the United Nations and from the mandate and functions conferred on the Organization by the Organization, without which the United Nations would not be able to fulfil the tasks to which it is bound under the Charter of the United Nations. From the discussion of legal theories of corporate personality, we observe that the main arguments lie between fiction and realist theories. The theory of fiction asserted that the entity of society as a legal entity is fictitious and exists only with the intent of the law. On the other hand, from a realistic point of view, the unity of society as a legal entity is not artificial or fictitious, but real and natural.

The realist also asserted that the law only has the power to recognize a legal entity or refuse to recognize it, but the law does not have the power to create an entity. The concept of legal personality refers essentially to the fact of the rights and obligations attached to it and to certain immunities and obligations attaching thereto. According to this theory, a legal person is a real personality in the extrajudicial and pre-judicial sense of the term. It also assumes that subjects of rights must belong not only to human beings, but to every being who has his own will and life. As a legal person and as “alive” as man, a society is also subject to rights[27]. In 2010, the U.S. Supreme Court issued a decision that many legal scholars call a victory for corporate rights. The decision, Citizens United v. Federal Election Committee, expanded corporate freedom of expression by declaring it unconstitutional to prohibit corporations from participating in election expenses and campaigns. While critics see this decision as tantamount to allowing corporate-sponsored applicants in the future, proponents argue that it is unfair to grant legal personality that grants equal responsibilities but not equal rights. The law stipulates that companies and organizations may have rights and obligations, as may individuals and individuals. This applies to companies that have a legal form with legal personality, such as a private or joint-stock company (bv or nv).

The company is then a legal person. You establish a legal person by means of a deed with a notary. If you have a company with legal personality, you are not personally liable with your own money for debts or claims for damages, for example. Instead, your business is responsible. Accepting a company`s corporate personality essentially means recognizing another non-human entity to adopt a legal entity. This can be seen in the many theories of jurisprudence on corporate personality. The majority of major legal theories about corporate personality asserted that the legal entity of society was artificial. Theories of fiction, concession, symbol, and object supported the assertion that the existence of a corporation as a legal entity is not real. It exists only because the law of the State has recognized it as a legal person and it is recognized for specific purposes or purposes.

The theory of fiction, for example, has made it clear that the existence of a society as a legal entity is pure fiction and that the rights associated with it depend entirely on what the law attributes to it through fiction. The recognition by the courts of the extreme of this remedy and of the guiding principles of a fact-based balanced approach will not jeopardise the principle of autonomous legal personality, unless the judge is satisfied that the harm caused takes precedence over the need to respect this principle. Companies that act in accordance with the law and do not abuse the privilege of their own legal personality are not threatened by the development of exceptions to this principle, and the safeguards put in place by the courts and the legislator have made it possible not to jeopardize the solid foundations on which company law is based.