A Company or a Corporation Is an ‘Artificial Person’ Created by Law
“A company or a corporation is an ‘artificial person’ created by law.” Discuss.
Introduction
A company or a corporation is an artificial person not natural person. Artificial person are such as are created and devised by human laws for the purpose of society and government which are called corporation. Such artificial persons, known as corporation, possess similar rights and owe similar obligation as natural person, but have no physical or natural existence. The law in creating legal persons always does so by personifying some real thing. The legal entity[1] known as the company.
Corporate constitution
In the world in almost every jurisdiction a company must have a corporate constitution, which defines the existence of the company and regulates the structure and control of the company.
By convention, most common law jurisdictions divide the corporate constitution into two separate documents: i) The Memorandum of Association (in some countries referred to as the Articles of Incorporation) is the primary document, and will generally regulate the company's activities with the outside world, such as the company's objects and powers and specify the authorized share capital of the company.
A company cannot take any action outside the memorandum. If it does, than the action should be considered as illegal and the company may found guilty for that specific action.
ii) The Articles of Association (in some countries referred to as the by-laws) is the secondary document, and will generally regulate the company's internal affairs and management, such as procedures for board meetings, dividend entitlements etc[2].
Legal Rights and Obligation of the Corporation
As the company is an artificial person or a legal entity, so the law allows them to act as persons for certain limited purposes-
i) The ability to sue and be sued (ii) The ability to hold assets in its own name (iii) The ability to hire agents (iv) The ability to sign contracts
Introduction
A company or a corporation is an artificial person not natural person. Artificial person are such as are created and devised by human laws for the purpose of society and government which are called corporation. Such artificial persons, known as corporation, possess similar rights and owe similar obligation as natural person, but have no physical or natural existence. The law in creating legal persons always does so by personifying some real thing. The legal entity[1] known as the company.
Corporate constitution
In the world in almost every jurisdiction a company must have a corporate constitution, which defines the existence of the company and regulates the structure and control of the company.
By convention, most common law jurisdictions divide the corporate constitution into two separate documents: i) The Memorandum of Association (in some countries referred to as the Articles of Incorporation) is the primary document, and will generally regulate the company's activities with the outside world, such as the company's objects and powers and specify the authorized share capital of the company.
A company cannot take any action outside the memorandum. If it does, than the action should be considered as illegal and the company may found guilty for that specific action.
ii) The Articles of Association (in some countries referred to as the by-laws) is the secondary document, and will generally regulate the company's internal affairs and management, such as procedures for board meetings, dividend entitlements etc[2].
Legal Rights and Obligation of the Corporation
As the company is an artificial person or a legal entity, so the law allows them to act as persons for certain limited purposes-
i) The ability to sue and be sued (ii) The ability to hold assets in its own name (iii) The ability to hire agents (iv) The ability to sign contracts