By law, the corporate single and corporate aggregate are treated as individuals. There are different theories that have been developed to demonstrate the essence of personality. These theories could either be political, talking about the relationship between the state and the group residing within the state, or they could be a philosophical explanation relating to the existence of those individuals created by law. However, to deal with any issue or issue relating to the company, the courts have not consistently followed any of these specific theories, but, on the other hand, they are guided by practical considerations.
Different Types of Theories:
1.The Realistic Theory
2.The Concession Theory
3.The Fiction Theory
4.The Ownership Theory
5.The Organism Theory
6.The Symbolist Theory or The Bracket Theory
In comparison with the fictitious theory, this theory is. This theory says that the company has a real character, not a fictitious one. Gierke was the exponent of this hypothesis and was a critic of the theory of fiction. His view was that, and it is not created by law, the business has a real & recognized personality. This theory is also known as a sociological theory because there is a collective will of different members in the corporate aggregate and individual will is distinct from the collective will. So, the business has its own real psychic will, so instead of being a real personality recognized by law, it is not fictitious or imaginary. This theory, therefore, states that the aggregate personality has similar characteristics to that of a human personality.
This theory is very similar to the theory of fiction, but it does not assert exactly what the theory of fiction says. It states that the law itself can give birth to any legal personality. It is a concession or grant on the part of the law that creates and recognizes legal personality. The theory's supporters stress that this theory is correct at some point because the law would flow from any right or recognition to any personality. In order to validate or recognize any personality, recognition of the law is therefore necessary.
The fictitious personality is necessary to form an individual corporation that exists for its members by its own and even sustaining. There is a distinction here between a judicial person and a natural person. A natural person is a person born with his or her own personality but created by law, by a judicial or artificial person.
This is another theory of corporate personality. Bzinz, Bekker, and Demelius were those who have developed this theory and Planiol had elaborated it. This theory states that human beings are subjected to legal rights, not corporations. Furthermore, it says that a juristic person or corporation is not a person anyway. These are subjects which is a creation of law and this fictitious personality are there only for possessing property in common. Such personalities are only for acquiring ownership. Being in such ownership these personalities makes the contract, sustain legal proceeding like an actual person.
This theory is also referred to as the theory of the bracket, developed by Ihering and later advocated by Marquis de Vareilles. This theory is somewhat similar to the theory of fiction in which human participation is required and it also asserts that only human beings are subject to legal rights and certain obligations According to Ihering, the concept of corporate personality is essential because it is the tool that makes any goal clear and less complicated. So, it is important to look behind the corporate veil to know the actual position of any business. It is thus in line with the principle of corporate veil lifting.
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