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“A corporation may be defined as a legal entity or artificial person.” Explain what is meant by this statement.

      

“A corporation may be defined as a legal entity or artificial person.” Explain what is
meant by this statement.

  

Answers


Raphael
A corporation is an association of persons recognized as a legal entity. It has an independent
legal existence. It is a body corporate or a juristic person. It is an abstraction of law. This
statement is a correct observation.

A corporation is an artificial person in that inter alia, it is created through a legal process for
example charter, statute or by registration. The person formed is juristic or abstraction of
law. In company law, this is referred to as the rule in Salomon V. Salomon and Co. Ltd.

A corporation has several characteristics peculiar to it, for example:
- Perpetual Succession: being a creation of law, it has capacity to exist inperpetuity, it can only be killed through a legal process.
- Sue or be sued: a corporation has capacity to sue to enforce its rights and maybe sued on its obligations.
- Capacity to contract: a corporation has legal ability to enter into contractual relationships. It can hire and fire.
- Owning of Property: it has capacity to own property. The property of a corporation is vested in it. It has an insurable interest in it.
- Common Seal: a corporation has a common seal to authenticate its transactions.
These characteristics clearly demonstrate that a corporation is an artificial person.
raphael answered the question on April 17, 2018 at 18:05


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