Legal person
The term Legal Person (also called juristic person or artificial person) refers to any entity that the law recognises as capable of having legal rights and duties, even though it is not a human being. The concept is fundamental to jurisprudence, as it extends the notion of personality beyond natural human beings to include entities such as corporations, states, associations, and institutions.
A legal person can own property, enter into contracts, sue and be sued, and perform legal acts in much the same way as a natural person. The recognition of such entities as persons in law is a legal fiction developed to facilitate collective ownership, business activities, and governance in complex societies.
Meaning and Definition
In legal theory, personality denotes the capacity for rights and duties under the law. A legal person, therefore, is any subject to whom the law attributes this capacity.
Salmond defines a person as “any being whom the law regards as capable of rights and duties.” According to him, the term “person” does not necessarily mean a human being; it signifies a subject of legal rights.
John Austin similarly observed that a person is a subject capable of bearing legal rights and obligations, irrespective of whether it is human or artificial.
Thus, a legal person is an entity — natural or artificial — recognised by law as a subject of legal relations.
Types of Legal Persons
The law distinguishes between two main types of persons:
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Natural Persons
- These are human beings recognised by law as having inherent rights and obligations.
- Every living human being, from the time of birth to death, is a natural person.
- Natural persons have physical existence and moral responsibility, unlike artificial persons.
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Legal (Artificial or Juristic) Persons
- These are entities created by law and given legal recognition and capacity to act.
- They do not have a physical body but exist in contemplation of law.
- Examples include corporations, companies, municipal bodies, universities, trusts, and states.
A legal person may act only through human agents, but the acts of those agents are attributed to the entity itself.
Characteristics of a Legal Person
A legal person possesses the following key characteristics:
- Recognition by Law: The entity must be acknowledged by legal systems as capable of rights and duties.
- Separate Legal Personality: It has an existence distinct from the individuals composing it.
- Capacity to Sue and Be Sued: It can appear as a party in legal proceedings.
- Capacity to Own Property: It may acquire, hold, and dispose of property in its own name.
- Perpetual Succession: Its existence is not affected by the death or change of its members (e.g., a corporation continues despite changes in shareholders).
- Limited Liability: In many cases, members’ liability is limited to their share in the entity.
These attributes make legal persons indispensable for modern commerce, administration, and collective human activity.
Examples of Legal Persons
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Corporations and Companies:
- A registered company is a classic example of a legal person. It can own property, enter into contracts, and be sued in its corporate name.
- Example: Salomon v A. Salomon & Co. Ltd. (1897) established that once incorporated, a company becomes a distinct legal entity separate from its members.
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State or Government:
- The State is recognised as a legal person capable of owning property, entering into treaties, and performing legal acts through its organs.
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Municipal and Local Authorities:
- Bodies such as city councils, development authorities, and panchayats have corporate legal personality under statute.
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Universities and Charitable Trusts:
- Educational institutions and trusts may sue or be sued in their institutional name.
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Sole Corporations:
- Certain offices, such as the President, the Bishop, or the Public Trustee, are treated as legal persons in their official capacity, allowing continuity of office despite change in holder.
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International Organisations:
- Entities such as the United Nations and World Bank are recognised as international legal persons, possessing rights and duties under international law.
Theoretical Basis of Legal Personality
Jurisprudence offers several theories to explain how artificial entities come to possess legal personality:
1. Fiction Theory (Savigny)
According to this theory, a legal person is merely a creation of law — a fiction used for convenience. Only human beings have real existence; artificial persons exist only in the eyes of law. The law personifies a group or body to enable it to act as a single unit.Example: A corporation has no soul or body, but the law treats it as if it were a person.
2. Realist Theory (Gierke)
The realist theory asserts that groups and associations have a real existence independent of their members. Law merely recognises this social reality. A corporation, therefore, is a real social organism, not a mere fiction.
3. Bracket or Symbolist Theory (Ihering)
Ihering suggested that the personality of corporations is simply a symbolic device — a bracket used to group the rights and duties of the individuals composing it. The legal person does not exist apart from its members but serves as a convenient representation of collective rights.
4. Purpose Theory (Brinz)
Under this theory, legal persons are created to serve specific purposes. Rights are not vested in any real or imaginary entity but are assigned to fulfil certain objectives, such as public welfare, charity, or education.
5. Concession Theory
This view holds that legal personality is conferred by the State as a concession. No entity has legal personality unless recognised by law. A corporation, for instance, exists only because the State has granted it that status.
Each theory explains different aspects of legal personality; in practice, modern law adopts a combination of these approaches.
Legal Personality of Non-Human Entities
The idea of legal personality extends even to non-human and non-corporate entities in certain circumstances, illustrating the flexibility of legal imagination.
- Temples, Deities, and Churches: In Indian law, a Hindu idol is treated as a juristic person capable of owning property and being represented by a guardian or trustee.Example: Pramatha Nath Mullick v Pradyumna Kumar Mullick (1925) — the Privy Council held that a Hindu deity is a legal person for property ownership.
- Rivers and Natural Objects: Courts in some jurisdictions have recognised natural entities as legal persons to protect the environment.Example: In Mohd. Salim v State of Uttarakhand (2017), the Uttarakhand High Court declared the Ganga and Yamuna rivers as legal persons to safeguard their ecological interests.
- Animals: Emerging jurisprudence increasingly recognises animals as legal persons for the purpose of protection from cruelty and preservation of biodiversity.
These developments reflect the expanding moral and legal recognition of entities beyond traditional human or corporate boundaries.
Legal Personality in Indian Law
In India, the recognition of legal personality is well established both in statute and case law.
- Companies Act 2013 grants corporate personality to registered companies.
- Trusts, Cooperative Societies, and Universities obtain personality through registration or incorporation.
- Temples, idols, and charitable institutions are recognised as juristic persons under Indian jurisprudence.
- The State and Union of India act as legal persons in all matters of governance and liability.
Thus, Indian law adopts a broad and inclusive view of legal personality, combining traditional and modern notions of juristic personhood.
Importance of Legal Personality
The doctrine of legal personality serves several essential functions:
- Facilitates Collective Action: Enables groups to act as single units in legal and commercial affairs.
- Ensures Continuity: Allows perpetual succession, unaffected by death or changes in membership.
- Promotes Economic Growth: Encourages investment through limited liability and corporate autonomy.
- Simplifies Legal Processes: Provides a single legal identity for complex organisations.
- Expands Legal Protection: Extends rights and duties to entities such as charities, deities, and natural environments.
Limitations of Legal Personality
- A legal person is a creation of law and cannot act beyond powers conferred by its constitution or statute (doctrine of ultra vires).
- It lacks moral conscience; hence, liability must be fixed through human representatives.
- Its rights and duties are artificial, limited to the purposes for which it was created.
- Legal personality may be abused to evade liability or perpetrate fraud, requiring courts to pierce the corporate veil in such cases.