PROVIDING LEGAL CAPACITY AS AN ARTIFICIAL LEGAL PERSON AND SEPARATE LEGAL IDENTITY

To avail rights under the law, such as the right to own property, right to enter into contracts, right to sue, etc., the company or individual must have legal capacity.

The following are the features of a legal or juristic person.
– Has a real existence but its personality is fictitious.
– Maybe real or imaginary, but the law regards them as having rights and duties
– They are also called fictitious, juristic, artificial or moral
– They perform their functions through natural persons only.
Examples: corporations, companies, universities, president, secretaries, municipalities, gram panchayats, rivers.

However, just being an Artificial Person does not get one rights on their name. Unless the entity gets legal capacity and is incorporated, it won’t get rights of its name. It has to be registered and then be provided with corporate personality. Once it is recognised as an Artificial Person, the company acquires rights and is provided with a legal capacity.

A company is an artificial person as is understood by the aforementioned definitions. It must be incorporated and registered under the Companies Act, 1956/2013. Once registered and incorporated under the law, the company acquires a Legal Existence and Capacity.

A company then becomes a “Body Corporate” under Section 2(11) of Companies Act. The bracket under which an association gets registered becomes body corporate. A company registered under Companies Act becomes a body corporate when it has its corporate personality and has legal existence.

A company carrying on business in India includes a company even incorporated outside India. E.g.: Amazon, Coca Cola. This is so that the company can be sued by Indian shareholders or any aggrieved individuals.

CORPORATE PERSONALITY OF A COMPANY

When one or more natural person acts as a single entity for legal purposes and has a legal name, the entity gains certain rights, privileges, responsibilities and liabilities. E.g. Payment of taxes, to own separate property, right to sue a third party, etc. When an artificial person is incorporated following law it acquires a legal/corporate personality which is a pre-requisite to sign any contract, international documents, treaties, etc. A company registered under the Companies Act, 1956/2013 is recognized to become a body corporate where:

1. It acquires a legal personality of its own – separate and distinct from its members.
2. It has perpetual succession.
3. It has a common seal.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.