Theories of Corporate Personality Advantages and Disadvantages of Corporation. Theories of Personality. Labels: Company Law, Jurisprudence. They believed in the existence of many independent institutions within State which is the supreme institution. Theories of Corporate Groups: Corporate Identity Reconceived Virginia Harper Ho* I. I ... ground of Corporate Legal Personality, 35 YALE L.J. A corporation is an artificial being created by a group of individuals with the aim to do business. The origin of purpose theory is to be traced back to Stiftung of German Law. In India, following the common law principles, these theories have not gained immense foothold in practical corporate governance, rather they have a strong theoretical position. They are treated as persons merely by a concession on the part of the sovereign. human beings are persons in real sense and thus a bracket is put around them to indicate that they are to be treated as one single unit when they form themselves into a corporation. Thus, a corporation is an artificial person enjoying in law, having the capacity with rights and duties and holding property. The principle of corporate personality of a company was recognized in the case of Saloman v. Saloman & Co[5]. From the discussion on the two important jurisprudence theories and the other theories, on corporate personality, it is observed that the main argument is that, the fiction theory claimed that the entity of corporation as a legal person is merely fictitious and only exists with the intendment of the law. Thirdly, the corporation is attributed will/animus by legal fiction.eval(ez_write_tag([[580,400],'lawtimesjournal_in-medrectangle-3','ezslot_6',111,'0','0'])); A corporation is distinct from its individual members. Even though there are many theories which attempt to explain the nature of corporate personality, none of them is said to be dominant. Hi guys Tho vedio is second part of topic "personality " in jurisprudence -2. However, unlike a natural person, these corporations have a perpetual existence. Other such examples of institutes with corporate personalities include banks, universities, corporate bodies, colleges, an association of persons, etc. Another important theory worth noting is Kelsen‟s Theory of corporate personality. L. REV. Realist Theory 3. It is an artificial personality given to corporation whereby certain rights and duties are attributed to it. The term personality is derived from a Latin word ”persona” which means to speak through, it is also a mask used by actors in Greece and Rome to play different roles or disguise themselves.. Theories of Personality. Thus incorporation is done merely for the sake of convenience[xii]. Legal personality is conferred only by law. The discourse focused on three theories of corporate legal personality that were played against each other.10 The theories aimed to explain the rationale for the status of groups as entities bearing legal rights and duties. Corporate personality is a fiction of law. I have completed my schooling from Delhi Public School R.K.Puram and currently in my penultimate year of law school at Hidayatullah National Law University. It was mid-level theory discourse. According to this theory, personal identity is not rooted in the identity of a deep and indivisible Self, but in the relatedness between temporally distinct psychological stages. The acceptance of the corporate personality of a company basically means that another non-human entity is recognized to assume a legal entity. It therefore, follows that the corporation would always do intra vires acts and never indulge in acts which are ultra vires[iii]. This group has a will of its own which is different and distinct from the individual wills of the members. Corporate personality is a concept in Christian theology that was articulated by H. Wheeler Robinson.As originally formulated, it dealt with areas of the Old Testament where the relationships between individuals and the groups that they were part of were treated. The individuals forming the corpus of the corporation are called is Corporate Personality. Legal personality is not fictitious, nor it depends upon State’s recognition. t says that any legal personality can take birth from law itself. Fiction Theory – This theory was put forward by Von Savigny, Salmond, Coke, Blackstone, and Holland etc. It is based on organic theory of the State which was supported by fascists to uphold supremacy of the State. Juristic personality of corporations must contain three essential conditions.eval(ez_write_tag([[580,400],'lawtimesjournal_in-box-3','ezslot_1',134,'0','0'])); 1. It is entirely at the discretion and disposal of the State to recognise or not to recognise a corporation as a juristic person. Firstly, there must be a group or body of human beings associated for a certain purpose; 2. ... THEORIES OF CORPORATE PERSONALITY A. The fiction theory, also named natural entity theory or organic theory, describes that the legal person has no actual reality, no mind, no willing, the legal person exists only in law. According to this theory, the personality of a corporation is different from that of its members. Nonetheless, there are five principal theories, which are used to explain corporate personality, namely, the fiction theory, realist theory, the purpose theory, the bracket theory and the concession theory. A corporation is an artificial being created by a group of individuals with the aim to do business. Fundamentals of Business Mathematics & Statistics, Fundamentals of Economics and Management – CMA, Schools of Jurisprudence – Analytical Positivism, Purpose of Law – Justice, and Law Approaches of Different School, Purpose of Law – Purpose of the Supreme Court in the Case of Article 147, Schools of Jurisprudence – Concept of Dharma, helps with the development of trade and industry. As per the fiction theory, a corporation exists only as an outcome of fiction and metaphor. Ø So according to this theory, corporate personality is a social organism who has its members, own will and body. The existence of a corporation is actually in fact and not based on any fiction unlike the previous theory. As per law, even non-natural entities can be an artificial legal person and enjoy rights and duties. It does not come to an end with the death of its individual members and, therefore, has a perpetual existence. Theories are:- 1. The word fictitious implies something which is not real, which is exactly what the theory implies an imaginary creation of law. 3. This concept has been recognised both in English and Indian law. Such a corporation is represented by its members and agents. In the practical world, however, we find that the personality of the corporation is separate than that of its members and agents. The doctrine of Corporate personality was approved for the first time in a leading case Soloman vs Soloman & Co. Ltd. (1897) A.C 22 (1895-99) All E.R. In. This video elaborates about the theories of Corporate Personality on the basis of which legal personality is granted to corporation. I enjoy cooking, traveling, writing and research. This is similar to the fiction theory. John Marshall who is the Chief Justice of the United States Supreme Court fro… A personality of a company is basically the legal recognition of its own individual independent presence in These theories offer us a theoretical perspective on the topic allowing us a better understanding. Download & View Theories Of Corporate Personality as PDF for free. Further the authors have analysed in detail the “five theories of corporate personality namely, Fiction, Concession, Realist, Group Personality Theory and Symbolist Theory”. Company persona is the known thought with the accordance in legislation that an organization is interpreted and identified to be an present unmarried prison entity by itself as it will probably stand on my own clear of department of its frame participants. It is […] READING: Gower and Davies, 8 th Edition 2008, Chapters 8 and 9 ; Hicks & Goo 6 th Edition Chapter 3 and Chapter 20.12.; 1. Several factors make the discourse on corporate personality theories particularly interesting. This can be explained through the example of a family. This theory says that only human beings are properly be called as „persons‟. My argument for corporate personality builds on the Lockean and Humean theory of personal identity over time. Concession Theory. It is purely analytical & analyses a corp. out of existence. The individuals forming the corpus of the corporation are called is Corporate Personality. The theories that have been propounded are philosophical, political or analytical. Corporations have been attributed with personality to ensure that it has a separate existence from the people who constitute it. What survives is only a fictitious creature of law. The whole theory of incorporation is based on the theory of corporate entity but the separate personality of the company and its statutory privileges should be used for legitimate purposes only. So as per this theory, only the State can endow legal personalities, not the law. The fiction, concession, symbolist and purpose theories supported the contention that existence of corporation as a legal person is not real. This may lead to dictatorship and arbitrary restrictions on corporate bodies, particularly the political entities. What is the value of theories of corporate personality in Corporate Governance? 33 (H.L). So the corporation does not owe its existence to the state or the law. Such a corporation under the law has a legal identity of its own. CORPORATE PERSONALITY Arun Verma 1 (c) Arun Verma 2. The main difference lies in the fact that the fiction theory denies that corporate personality has any existence beyond what the state chooses to give it, however, the realist theory holds that corporation is a representation of physical realities which the law recognises. As per the fiction theory, a corporation exists only as an outcome of fiction and metaphor. The theorists and jurists have often expressed conflicting views regarding the true nature of corporate personality of corporations. However, it states that the legal entity has been given a corporate personality or a legal existence by the functions of the State. Why have Corporations been attributed with Personality? Fiction Theory • A corporation is clothed with a legal personality. Legal personhood has never been a self-evident classification that applies only to living human beings. This is further strengthened by the limited liability principle as the shareholder would be liable only to the extent of his investment. This can be seen from the many theories of jurisprudence on corporate personality. According to Pettet (2005), he suggested that “the nature of the corporation, particularly its corporate personality, became the focus of thought.” He identified two main theories: the fiction theory and the real entity theory. THE DOCTRINE ESTABLISHED: SALOMON V SALOMON [1897] AC 22 Corporate personality is a concept in Christian theology that was articulated by H. Wheeler Robinson.As originally formulated, it dealt with areas of the Old Testament where the relationships between individuals and the groups that they were part of were treated.

theories of corporate personality

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