4 Legal Persons
4 Legal Persons
4 Legal Persons
• Purpose Theory
• Brinz later developed by Barker
• Assumes persons can only be natural and not
juristic
• They are ‘subjectless properties’ designed for
certain purposes
• To Duguit purpose of law is social solidarity
• The question is always whether a given group
is pursuing a purpose which confirms to social
solidarity
• Theory of Enterprise Entity
• Based on the reality of the underlying enterprise
• Approval by law of the corporate form establishes
a prima facie case that assets activities and
responsibilities of the corporation are a part of
the enterprise
• If not then the extent of the responsibility is
determined by the underling enterprise
• The theory explains the attitude of law towards
unincorporated associations
• The theory is a utilitarian one
• The Fiction Theory
• Salmond and Holland
• Personality is attached to groups and
institutions by pure legal fiction and this
personality is different from the individual
beings
• Idol or a group of persons are persons because
it is so imagined by fiction of law
• The Realist Theory
• Gierke
• The group or the institution has an existence
beyond the aggregate of the individualities of the
persons forming it
• A corporation has a real existence
• It has a corporate will that manifests itself
through the actions of its agents
• Maitland and Pollock develop the theory to state
that it is a living organism and a real person with
body and members and a will of its own
• The Concession Theory
• Savigny
• Sovereign and the states are the only real
entities
• All intermediate groups cannot claim
recognition as persons
• Corporate personality arises only as a result of
state acts or by concessions granted by the
state
• Bracket theory or The Symbolist Theory
• Paton
• Regards members of the corporations as the
bearers of rights and as beings bound by the
duties which are for convenience referred to
as persons
• A B and C form a company – it is inconvenient
to refer to them as such – so a bracket is put
around them and a name given – but in order
to understand the real position we must
remove the bracket
LIFTING CORPORATE VEIL
⦿ Salomon v. Salomon – essential characteristic of
a corporation is that it has a personality
distinct from its members
⦿ Corporate body is distinct from the members
forming it
⦿ People’s Pleasure Park v. Rohleder – a
restrictive covenant that title of land should
not pass to a a coloured person operated to
prevent transfer to a corporation of which all
members were negroes – held transfer valid as
corporation distinct from its members
⦿ Diamler Co v. Continental Tyre Co.- House of
Lords lifted the veil to find that the company
was an enemy company