Juristic persons
Legal personality is not given only to human beings.
Persons can form a corporation, that corporation hav-
ing a legal personality with similar rights and duties
to human beings. As we have seen, these corporations
are formed by Royal Charter, Act of Parliament, or by
registration under the Companies Act 2006 or previous
Acts. There are also corporations sole, which were intro-
duced by lawyers under common law.
Charter companies and those formed by Act of Parlia-
ment have their own legal personalities and act through
human agents. This is also true of the registered com-
pany, which is allowed by law through the agency of its
directors to make contracts, hold property, and carry on
business on its own account, regardless of the particular
persons who may happen at the particular time to hold
its shares.
Thus, if A and B form a registered company, AB Ltd,
the separate legal personality of AB Ltd is created on
formation. A and B can now, if as is likely they have been
appointed as directors of the company, make contracts
on behalf of AB Ltd as its agents. The rights and duties
under those contracts will belong to AB Ltd and not to
A and B as individuals. The rule of corporate personal-
ity is illustrated by the following.Part 2Business organisations
76
Salomonv Salomon & Co(1897)Mr Salomon carried on business as a leather merchant
and boot manufacturer. In 1892 he formed a limited
company to take over the business. Mr Salomon was the
major shareholder. His wife, daughter and four sons
were also shareholders. They had only one share each.Figure 4.1Business organisations in terms of natural and juristic persons