INFOLINK UNIVERSITY COLLAGE HAWASSA CAMPAUS 2020

1) Discuss the meaning and attributes of personality in comparison with non-persons?

A person, in the first instance, is a human being who is individual member of the society and it also refers
to an entity (such as a corporation) that is recognized by law as having the rights and duties of a human
being. A person is any being whom the law regards as capable of rights and duties. Any being that is so
capable is a person, whether a human being or not, and no being that is not so capable is a person, even
though he be a man. Persons are the substances of which rights and duties are the attributes. It is only in
this respect that persons possess juridical significance, and this is the exclusive point of view from which
personality receives legal recognition. Or hence, a person is a being or an entity that possesses rights and
duties or is a subject of rights and duties before the eyes of the law.

Legal personality is the legal status of one regarded by the law as a person: the legal conception (device)
by which the law regards a human being or an artificial entity as a person. It is a particular device by
which the law creates or recognizes units to which it ascribes certain powers and capacities.

Legal personality is the attribute feature of being the subject of rights and duties before the eyes of the
law. If one is the subject of rights and duties it is a person and the process is called personality.

The Attribute Features of Legal Personality

By the attribute features of legal personality we are referring to those characteristics or attributes that
distinguish beings endowed with legal personality from beings with no legal personality. Accordingly, the
following are the typical attribute features of legal personality:

 The right to have a name (to be named) to be identified by it. If one is not a person s/he does not
meaningfully cause use of their name. In Ethiopia we follow a three degree naming scheme,
which is consecutively, First Name, Father’s Name and Grand Father’s name.
 The ability to sue or be sued by its own name.
 The ability to own and administer property, whether the property is movable or immovable;
tangible or intangible.
 The ability to engage in a Juridical Act (an act to be effected by the law), such as concluding a
contract, issuing of a WILL and so on.
 The obligation (duty) to be pay taxes as per the conditions prescribed by law.

2) Briefly discus the difference between violating the essential element of contract and non-
performance of contract?

A contract is any agreement enforceable by law. You should never enter into a contract without
understanding the legal responsibilities involved. Not all agreements are contracts, however. A Son’s
promise to take the garbage to the curb before his father returned home is probably not a contract.

The six elements of a contract are offer, acceptance, genuine agreement, consideration, capacity, and
legality.

To be legally complete, a contract must include all six elements. Notice that the list does not include
anything written. Not all contracts have to be in writing to be enforceable.

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 Offer: is a proposal by one party to another intended to create a legally binding agreement.
 Acceptance: is the second party’s unqualified willingness to go along with the first party’s proposal.
If a valid offer is met by a valid acceptance, a contract exists.
 Genuine Consent: Some circumstances, such as fraud, misrepresentation, mistake, undue influence,
and economic duress, can destroy the genuineness of an agreement.
 Capacity: The fourth element is the legal ability to enter a contract. The law generally assumes that
anyone entering a contract has the capacity, but this assumption can be disputed.
 Consideration: the fifth element is the exchange of things of value. The parties to the contract should
exchange things of value to one another. If not, there is no consideration in that agreement.
 Legality of Object: People cannot enter into contracts to commit illegal acts. Consequently, legality
is the final element of a contract.

The word valid means legally good, meaning that a valid contract is one that is legally binding. On the
other hand, a contract that is Void has no legal effect. An agreement that is missing one of the previously
discussed elements would be void, such as any agreement to do something illegal.

When a party to a contract is able to void or cancel a contract for some legal reason, it is a Voidable
contract. It is not void in itself but may be voided by one or more of the parties. A contract between two
minors, for example, could be voidable by either of them. An unenforceable contract is one the court will
not uphold, generally because of some rule of law, such as the statute of limitations. If you wait too long
to bring a lawsuit for breach of contract, the statute of limitations may have run its course, making the
contract unenforceable.

Non-performance of a contract refers to the failure of either one or both of the parties to perform
contractual obligations in conformity with the terms of the contract and the law. It is also called breach of
a contract.

The following are the major instances of non-performance:

 This failure or breach may be total - where a party totally fails to honor the terms of a contract.
 It may also be partial- where a party has performed his/her obligations only partly.
 It may also relate to delay in performance.
 Offering performance at a place other than the place agreed up on by the parties or at a place
fixed by law also constitutes non-performance.
 Delivering a thing that non-conform to the contract or
 Delivering a defective thing also amount to the breach of contract.
 Moreover, an interruption of a successive delivery also amounts to non-performance.

3) Differentiate between special and general agent?

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A general agent is a regular policy agent who is tied to selling insurance products and carriers of one
particular company.

Their main aim is to help insurance seekers to buy insurance products of their company.

A special agent is little different concept. Special agent is not to be confused with general agents as they
both have different objectives and authorities.

The concept of a special agent was felt necessary by companies in order to outperform the intense
competition in the market.

The job of a special agent is to seek people looking to buy insurance.

They have limited authorities i.e. a special agent is not authorized to sell insurance products to customers.

Their main aim is to find customers willing to buy insurance and help them to connect to the general
agent.
A general agent is the main agent for an agency with lots of agents or an agent who is the middleman
between the company and individual agents selling a product. I have never heard of a special agent in
regards to insurance only regular ordinary insurance agents. They are licensed to sell specific kinds of
insurance in a particular jurisdiction or multiple jurisdictions.

A general agent is a person authorized to transact every kind of business for his/her principal. S/he acts as
a representative of another, who has a mandate of general nature.

4) Explain the major distinction between companies and partnerships?

Partnership Company
Simple Organizational Structure Complex Organizational Structure
Low Startup Costs High Startup Cost
Liabilities Upon Members Liabilities of the Company
Taxation did on Individual Members Taxes did on the company and members
One cannot transfer shares One can easily transfer shares
End upon death, insanity, and insolvency of a member Can exist for a long time

Differences between Partnership and a Company

1. Structure of Partnership and a Company

One of the main differences between partnerships and companies is the formation structure. Companies
have a complex structure due to their large number of people involved in the formulation of the company.
The people forming the company include the shareholders who employ a management team to run the
company on their behalf. This means that a company has a complex organizational structure with
hierarchy a bureaucratic root in which decisions and instructions flow. On the other hand, a partnership
does not have a complex organizational structure because it involves two people combining their efforts

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and strategies to offer goods and services to people. There are no structures in a partnership because the
owners make decisions, which influence the working of the partnership.

2. Startup Costs of Partnership and a Company

The other difference between partnerships and companies is the costs involved in the formation of these
types of businesses. Companies involve high costs of formulation due to the legal requirements that the
government puts in place to ensure that a company has met all the required fundamentals. It is important
to highlight that formulation of corporations include a lot of administration costs and complex tax
requirements. Besides, there are many employees involved in the formulation of a corporation, which
increases the cost of forming a company. This is not the same when it comes to the formulation of a
partnership. Partners are just required to register the business with state and obtain local or state business
licenses permits.

3. Liabilities of Partnership and a Company

Another difference between a company and a partnership is the issue of liability. For a partnership, the
owners of the organization are purely responsible for the liabilities of the organization. In case of the
dissolution of the partnership, the properties of the partner members will be taken to pay for the liabilities
of the partnership to pay the debts involving their company. Therefore, all the legal liabilities are
bestowed upon the partner members, which is one of the main disadvantages of a partnership. It is also
essential to note that partners include a partnership agreement, which states the percentage of the
partnership he or she owns. On the other hand, a company is a legal entity, which shields the owners of
the organization from being liable for the debts of the company. It is important to understand that owners
of the organization and other shareholders are not at risk of losing personal assets.

4. Business Taxation in Partnership and a Company

The method of taxation is another aspect that differentiates between a partnership and a company. A
partnership does not pay taxes as losses and profits are passed to the individual owners upon which they
pay the income taxes. It is worth noting that partners have to file a tax return which shows their share of
profit or loss from the partnership and other incomes upon which they are taxed. This is different from
corporations which are taxed directly by the revenue collecting body. It is worth noting that a company is
a legal entity which means that the taxes of the company cannot be passed to the individual owners of the
organization. Corporations pay both state and national taxes while shareholders pay their taxes, which are
based on salaries, bonuses, and the dividends that they receive from the profits of the company.

5. Life Time in Partnership and a Company

The life of a company and that of the partnership forms a significant difference between the two forms of
business ownership. It is important to note that the life of a company is formulated such that it can last in
its entirety. Its existence is not affected by the change of the membership or death of any of the members
of the organization. Besides, a company’s life may not be ended due to the insolvency of one of the
members. On the other hand, there are specific situations upon which the life of a partnership can come to
an end. Some of the main incidences that may lead to the end of a partnership include the death of one of
the members, insolvency, or insanity of any one of the partner.

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6. Transfer of Shares in Partnership and a Company

Lastly, shares or units of a company can easily be transferred from one person to another unless restricted
by the articles of the organization. On the other hand, a partner cannot transfer his share without the
consent of all other partners. This explains why the shares of an organization are traded on the stock
exchange while the shares of a partnership are no traded in the stock market.

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