COMPANY LAW
ASSIGNMENT II
Anoushka Singh Songara
8th semester, B.A. LL.B.
201734301035
CORPORATE
PERSONALITY
Corporate Personality is a creation of law. Legal
personality of a corporation is recognized both in
English and Indian Law. A corporation is an artificial
person enjoying in law the capacity to have rights and
duties and holding property. A corporation is
distinguished by reference to different kinds of things
which the law selects for personification. The Corporate
individuals forming the corpus of the corporation are Personality
called its members.
It is significant to note that a corporation is distinct from
its individual members. It has the legal personality of its Corporation Corporation
own and it can sue and be sued in its own name. It does Aggregate Sole
not come to an end with the death of its individual
members and, therefore, has a perpetual existence.
However, unlike natural persons, a corporation can act
only through its agents. Law provides special procedure
for the winding up of a corporate body.
CORPORATION AGGREGATE
Type of legal entity where an association of human beings are united to form a single entity
that's separate from its owners.
Limited companies are the best example of a corporation aggregate.
Such a company is formed by a number of persons who as shareholders of the company contribute
or promise to contribute to the capital of the company for furtherance of a common object. Their
liability is limited to the extent of their share-holding in the company. A limited company is thus
formed by the personification of the shareholders.
The property of the company is not that of the shareholders but its own property and its assets and
liabilities are different from that of its members. The share-holders have a right to receive
dividends from the profits of the company but not the property of the company. [Salomon v.
Salomon and Co. Ltd., (1897)]
CORPORATION SOLE
It is an incorporated series of successive persons.
It consists of a single person who is personified and regarded by law as a legal person. In other
words, a single person, who in exercise of some office or function, deals in the legal capacity and
has rights and duties.
A corporation sole is perpetual.
The examples of corporation sole are Postmaster-General, Public Trustee, Comptroller &
Auditor-General of India, the President of India, The Crown in England etc.
Generally, corporation sole are the holders of a public office which are recognized by law as
corporations.
The chief characteristic of a corporation sole is its “continuous entity endowed with a capacity
for endless duration”.
The object of corporation sole is similar to that of corporation aggregate.
In it a single person holding a public office holds the office in a series of
succession, meaning thereby that with his death, his property, right and liabilities
etc., do not extinguish but they are vested in the person who succeeds him.
Thus on the death of a corporation sole, his natural personality is destroyed but
legal personality continues to be represented by the successive person.
In consequence, the death of a corporation sole does not adversely affect the
interests of the public in general.
POSITION OF CORPORATE PERSONALITY IN INDIA
The concept of corporate personality is well recognized in India.
The position of Karta in a Hindu coparcenary is an illustration on the point. In the coparcenary
system all members of the family have some right and duty, but the karta is the head of the family
who manages the entire family property. He has the right to alienate the family property and all
the family members are under his control. He can sue or be sued on behalf of the joint family. In
juristic terms he is a corporation sole having double capacity i.e. - As a natural person he is the
eldest of the family and as a legal person he is the karta of the family.
The Reserve Bank of India has a corporate existence because it is an incorporated body having
an independent existence. But Union Public comm. and Hindu Family both of them are
recognized as a legal person because both these cannot hold properties in their own name.
ADVANTAGES
Incorporation greatly simplifies legal procedure, enabling persons to sue a single
incorporated body rather than numerous individuals. The corporation, on its part, can
also sue as a single legal entity.
The death or withdrawal of a member or members does not disturb the existence of an
incorporated body. The members may come and go but the corporation continues
perpetually forever.
The financial liability of shareholders is limited only to the extent of their share-holding
and not beyond it.
An incorporated body being a legal entity, can freely dispose of its property in its own
name. Its property is clearly distinguishable from that of the shareholder’s property.
THANK YOU
