INTRODUCTION

 Derived from Greek word, “persona”

 ‘mask through which his voice must be
sounded’
 Legal meaning- rights and duties bearing
unit
 Distinguished from humanity
 Persons are of two kinds: Natural and
legal
Natural persons
 All human beings are not legal persons
 Exception- slaves, ascetic(sanyasi)
 Persons with physical disabilities
Personality starts with birth

Nasciturus pro iam nato habetur,

quotiens de commodis eius agitur
means The unborn is deemed to have
been born to the extent that his own
benefits are concerned
Animals have no legal
personality
 No rights and duties under law
 A trust for the benefit of animals can be
created.
Personality ends with death

De mo tius nil nisi bonum

Means dead have no right and can suffer
no wrong.

Exceptions:
 Deceased’s body

 Reputation

 Estate
 Rights of animals
 Trust for protection of class of animals
can be created
 Status
 Capacity- personal and professional
Capacity
 A person may have many capacities
 But double capacity does not men
double personality
Legal personality
 Acc to Salmond, “ legal person is any
subject matter other than a human
being to which law attributes
personality.”
 It includes an object, a mass of property,
an institution , a group of human beings
etc.
Legal person
 Acc to Salmond, “ is any subject matter
other than a human being to which law
attributes personality.”
 Evolution of corporate personality
 Concept of pater familis
 Hereditas jacens- inheritance in between
the death of the ancestor and the
acceptance of inheritance by the heir.
Indian situation
 Indian Law: Coparcenary
 Corporations
 Idols and funds
 State
 Corporate Personality
 A Corporation is an artificial person enjoying in Law
capacity to have rights and duties and holding
property.
 There must be three conditions :
 Firstly, there must be a group or body of human beings
associated for a certain purpose;
 Secondly, there must be organs through which the corporation
functions;
 Thirdly, the corporation is attributed will by legal functions.
 There are two types of Corporation :
 Corporation Aggregate
 Corporation Sole
 Corporation Aggregate
 A corporation aggregate is an association of human
beings united for the purpose of forwarding their
certain interest.
 For certain reasons company has an independent
existence from those of its members. It is for this
reason that the company may become insolvent but
its members may still rich and wealthy.
Lifting or Piercing the Corporate
Veil
 The corporate veil of a company may be lifted to ascertain the
true character and economic realities behind the legal
personality of the company. This may be disregarded in the
following cases :
1. Where the corporate personality has been used for fraud or
improper conduct, the courts have lifted the veil and looked
at the realities.
2. The corporate veil of the company may be lifted where its a
corporate facade is in reality only an agency.
3. Corporate veil may be lifted where the company is
engaged in activities which are against the public policy.
4. For determining the real character and status of the
company, the court may ignore its separate entity and lift
the corporate as held in Daimler Co. Ltd. V. Continental
Tyre & Rubber Company.
5. Where the corporate facade of the company has been
used for evasion of taxes or duties.
3. purpose of the formation of the new company was
to use it as a device to avoid or reduce payment of
bonus to workers, the Supreme Court pierced into
the corporate veil to look into the real transaction.

4. The courts have sometime lifted the corporate veil

in quasi-criminal cases relating to companies in
order to look behind the legal person and punish
the real persons who have violated the law.
 Corporation Sole

 Corporation sole is an incorporated series of

successive persons.
 Corporation sole are the holders of a public office
which are recognised by law as corporation. The chief
characteristic of a corporation sole is its “continuous
entity endowed with a capacity for endless duration”.
 For Example: Post Master General, Comptroller and
Auditor General of India, President of India etc.
 continues to be represented by the successive
person. In corporation sole single person holding
the public office holds the office in a series of
successions means his rights, liabilities and
property do not extinguish but they are vested in
the person who succeeds him. So after the death
of the person his natural personality is destroyed
but legal personality
Advantages of incorporation
Unincorporated
Associations
 Sum total of members
 Social clubs etc.

 Babha F. Gulzar v. Commissioner of

Income Tax
Position of a partner and share holder is
not same
Theories of Corporate
Personality
1. Fiction theory- Savigny, Salmond, Coke,
Holland etc
Two fictions:
a. Corporation is given a legal entity
b. clothed with the will of an individual
Purpose is to protect general will
Can not be applied to fix civil and
criminal liabilities
2. Realist Theory German Jurist Johannes
Althusius, main propounder Gierke
Company is having real mind or will
exercised by Directors, shareholders etc.
3. Bracket theory
Symbolist theory- supported by Ihering
Corporate personality is just a symbol to
facilitate the working of the corporate
bodies.
Concept of lifting the corporate veil is
associated with it.
4. Concession theory
Recognition by state is must.
Resembles to fiction theory

5. Purpose theory
German jurist Brinz
Expanding horizons
 Bhopal Gas leak case
 Sahara Case
 Establishment of Green Tribunals