With reference to the law governing legal personality, distinguish between a “natural person” and a “legal person”
Distinction between a natural person and a legal person with reference to the law governing legal personality
- Natural Persons are simply human beings and they are internationally recognized to have and enjoy the basic human rights and freedom o There legal capacity shall be determined by their age, sanity of mind and other authority conferred upon them by the laws of their particular state. They are recognized as persons by reason of their inherent natural characteristics.
- Legal Persons are persons at law or juristic persons. They are incorporated associations, i.e. an association of natural persons who come together for a common objective after pursuing procedures of incorporation e.g. companies,
- Incorporation is the legal process by which a partnership or other form of unincorporated association is converted to a registered company. It thereupon becomes a legal person in its own right.
- The most fundamental attribute of incorporation from which all other consequences flow is that when an association is incorporated it becomes a legal person, separate and distinct from its members and managers,
The legal persons have the following characteristics:
- Separate/ distinct legal personality: Upon incorporation, a company becomes separate and distinct from the cooperators.
- Limited liability: Liability of the members or shareholders is limited to the extent of their shares.
- Perpetual Succession: Its life is not pegged on the life of their human members such as shareholders and directors.
- Common seal: It executes its transaction under the common seal of such entity although the seal is undertaken by human members.
- Capacity to sue or be sued in its own name and not of the human members.
- Capacity to borrow or lend by floating charge, (i.e. using any of its assets as security)