Legal Personality — Natural & Legal Persons; Corporate Personality — Jurisprudence Notes

Legal Personality — Natural & Legal Persons; Corporate Personality

In a famous Indian case a Hindu idol was held to be a “juristic person” that could own property and sue and be sued — through a human manager, but in its own name. If a stone deity can be a “person” in law, “person” plainly does not mean “human being”. It is a legal label the law attaches to whatever it decides can hold rights and owe duties — and deciding what qualifies is the whole of this topic.

Everyday hook: “person” in law is like a “member” of a club — the club decides who counts, and it need not be an ordinary adult human. A legal (juristic) person is any being or entity that the law recognises as capable of holding rights and owing duties. Personality is thus a legal creation, and legal persons are of two kinds:

  • Natural persons — human beings, recognised by law as persons. But note: not every human always has full legal personality (see the status of the unborn, minors, lunatics below), and historically some humans (slaves) were denied it.
  • Legal / artificial / juristic persons — entities other than human beings that the law clothes with personality: companies and corporations, registered societies and trade unions, the state, universities, and (in India) idols and religious endowments. They act through human agents but hold rights and owe duties in their own name.

The status of humans who are not ordinary adults (a favourite short note — give the rule for each):

  1. The unborn child. A child in the womb has no full personality, but the law protects its future interests: it can inherit and take property if later born alive; it can be a beneficiary; and causing its death or injury is a wrong. Its rights are contingent on being born alive.

  2. The minor. A minor is a legal person but with limited capacity — his contracts are generally void, he cannot fully manage his property (a guardian acts for him), and his criminal liability is limited by age.

  3. The lunatic (person of unsound mind). A legal person, but capacity is suspended while unsound: contracts made during insanity are void, and unsoundness may be a defence to crime (the M’Naghten rules).

  4. The drunken person. A legal person; voluntary intoxication is generally no defence, but where drink negatives the specific intention a crime requires, it may reduce liability.

  5. The dead person. A dead man is not a legal person — he can hold no rights and owe no duties. But the law still protects three interests connected with him: his body (rules on decent disposal and against desecration), his reputation (limited protection), and his will/estate (his wishes are carried out through his executor and the law of succession). These survive for the living who succeed him.

  6. Lower animals. Animals are not legal persons — they cannot hold rights; the law protects them by imposing duties on humans (cruelty offences) rather than by giving them rights. (Some modern decisions treat animals as entitled to protection, but the classical position is that duties are owed about them, not to them.)

Theories of corporate personality (the 16-mark core — how can a company, which has no body and no mind, be a “person”?):

  1. Fiction Theory (Savigny, Salmond). A corporation is an artificial person created by a fiction of law. Only human beings are real persons; the corporation’s personality is a fictitious creation, existing only in the eye of the law. Its will is the fictional attribution of its members’ will.

  2. Concession Theory (closely linked to fiction). Legal personality is a concession granted by the state — a corporation exists as a person only because the sovereign / state chooses to confer personality on it. No group is a legal person until the state concedes it (through incorporation).

  3. Bracket (Symbolist) Theory (Ihering). The corporation is only a bracket around its members — a convenient symbol or shorthand for the group of real human beings who compose it. When it matters, the law “removes the bracket” to reach the members behind it.

  4. Purpose Theory (Brinz, Bekker). Only human beings can be persons; a corporation is not a person at all but a “subjectless property” — property dedicated to a purpose and held for that purpose, not owned by any person. (It explains foundations and charitable endowments.)

  5. Realist (Organic) Theory (Gierke, Maitland). A corporation is a real person — a living social organism with a real will of its own, existing independently of the state’s recognition. The state merely acknowledges a personality that already exists; it does not create it. This is the opposite of the fiction and concession theories.

Advantages of incorporation (worth a line): perpetual succession (the company survives its members), limited liability, capacity to own property and to sue and be sued in its own name, and a distinct legal identity separate from its members (Salomon v Salomon (1897)). The corporate veil can, however, be lifted to reach the members where the company is used for fraud or evasion.

Salmond: “A legal person is any subject-matter other than a human being to which the law attributes personality — this recognition being by way of fiction where the entity is not a human being.”

In Simple Terms: A “legal person” is anyone or anything the law lets hold rights and owe duties — humans (natural persons) and entities like companies and idols (juristic persons). The law switches personality partly off for the unborn, minors, lunatics and the dead, and asks how a company can be a person — answered by five theories: fiction, concession, bracket, purpose, and realist (a real organism).

⚠️ DON’T CONFUSE — Fiction Theory vs Concession Theory

Both deny a corporation is a real person, but they answer different questions. Fiction theory asks what a corporation’s personality is and says it is an artificial fiction — only humans are real persons. Concession theory asks where the personality comes from and says it is a grant by the state — a group is a person only if the sovereign concedes it. Fiction = “it is not real, only imagined by law”; concession = “it exists only because the state allows it”. They often travel together, but do not treat them as identical.

🧩 WORKED EXAMPLE — Is it a legal person, and on which theory?

Facts. A newly-registered company sues a supplier in its own name; the supplier argues “a company is not a real person, so it cannot sue”.

Rule. On incorporation a company becomes a juristic person distinct from its members, able to hold property and sue and be sued.

Apply. The company is a legal person — on the fiction/concession view because the state, by registration, conferred personality; on the realist view because the group is itself a real organism the law recognises. Either way it can sue in its own name.

Conclusion. The supplier’s objection fails: legal personality does not require a body of flesh — it requires the law’s recognition, which incorporation supplies.

flowchart TD
    LP["LEGAL PERSONALITY<br/>capable of rights and duties"]:::root
    LP --> NA["NATURAL persons<br/>humans (unborn/minor/lunatic/dead = limited)"]:::leaf
    LP --> JU["JURISTIC persons<br/>companies, state, idols, societies"]:::leaf
    JU --> TH["Theories of corporate personality"]:::leaf
    TH --> T1["Fiction (Savigny/Salmond)"]:::leaf
    TH --> T2["Concession (grant by state)"]:::leaf
    TH --> T3["Bracket / Symbolist (Ihering)"]:::leaf
    TH --> T4["Purpose (Brinz)"]:::leaf
    TH --> T5["Realist / Organic (Gierke)"]:::leaf
    classDef root fill:#FFF8DC,stroke:#000,stroke-width:1px,color:#000;
    classDef leaf fill:#E6F3FF,stroke:#1E3A8A,color:#000;
    linkStyle default stroke:#888,stroke-width:1px;

Case Laws

  • Salomon v Salomon & Co. Ltd. (1897) — a company is a separate legal person distinct from its shareholders; the foundation of corporate personality.
  • Yogendra Nath Naskar v CIT (1969) — a Hindu idol is a juristic person capable of holding property and being taxed, acting through its manager.
  • Pramatha Nath Mullick v Pradyumna Kumar Mullick (1925) — an idol is a juristic person whose “wishes” (as to location and worship) the courts will consider through the shebait.

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