Kara Sears
An artificial person, also known as a juridical person, is a legal entity that is not a natural person but is recognized by law as having certain rights, protections, privileges, responsibilities, and liabilities. In other words, an artificial person is a non-human entity that has legal status and can enter into contracts, own property, and sue or be sued in court. Artificial persons are central to modern corporate law, allowing companies to enjoy rights and bear obligations in their name, separate from their shareholders, directors, and members. This concept is not limited to companies and can include intergovernmental organizations, international organizations, and even rivers, as in the case of the Whanganui River, which was granted legal personality under New Zealand law in 2017.
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What You'll Learn
Companies as artificial persons
An artificial person, also known as a juridical person, is a non-human entity that is recognised by law as having a legal personality and personhood. This means that an artificial person has a legal name and has rights, protections, privileges, responsibilities, and liabilities in law, similar to those of a natural person.
Companies are considered artificial persons because, although they are a collection of individuals, they exist independently in the eyes of the law. The concept of a company as an artificial person is fundamental to modern corporate law. Once incorporated, a company attains a legal status separate from its shareholders, directors, and members. This separation allows the company to enter into contracts, own property, and carry out business activities independently.
The principle that a company is an artificial person created by law is rooted in corporate legislation. In most jurisdictions, the formation of a company is a legal process that involves filing the necessary documents with a governmental body, typically the registrar of companies. Once the company is incorporated, it is recognised as a separate legal entity, distinct from its founders and shareholders.
The Salomon v. Salomon & Co. Ltd (1897) case is a landmark decision in corporate law that reinforced the notion that a company is an artificial person separate from its shareholders. The case established the principle that the debts and liabilities of the company are its own and not those of its shareholders.
Another important feature of a company as an artificial person is perpetual succession. This means that the existence of a company is not affected by changes in its membership, such as the death, bankruptcy, or incapacity of shareholders or directors. The company remains in existence until it is legally wound up or dissolved.
In summary, a company is considered an artificial person because it is a legal entity that exists independently of its members, with its own rights, obligations, and liabilities. This recognition as a separate legal entity allows companies to facilitate commerce, investments, and enterprise at a significant scale.
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Corporations as artificial persons
An artificial person, also known as a juridical person, is a non-human legal entity that has a legal name and rights, protections, privileges, responsibilities, and liabilities in law, similar to those of a natural person. In other words, it is an organization recognized by law as a fictitious person. The concept of a juridical person is central to Western law in both common-law and civil-law countries and is also found in virtually every other legal system.
Corporations are bodies corporate created by statute or charter. A corporation sole is constituted by a single member in a particular capacity, while a corporation aggregate is constituted by more than one member. Municipal corporations are created by statutes.
The concept of a company as an artificial person created by law is fundamental to modern corporate law. Once incorporated, a company attains a legal status separate from its shareholders, directors, and members. This legal distinction allows the company to enjoy rights and bear obligations in its name, facilitating commerce, investments, and enterprise. This concept was reinforced by the Salomon v. Salomon & Co. Ltd (1897) case, which set the precedent that the debts and liabilities of a company are its own and not those of its shareholders.
As artificial persons, corporations can own property, sue and be sued, enter contracts, and take other legal actions necessary for their business. They are considered immortal, meaning they can survive the death of their owners. The owners of a corporation are not personally responsible for its actions, debts, or obligations. Shareholders' liability is limited to the amount they invested in the company's shares, and their personal assets are protected if the company incurs debts.
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Legal rights and duties of artificial persons
An artificial person, also known as a juridical person, is a non-human legal entity that has been granted certain rights and responsibilities akin to those of a human being. Artificial persons are created by law to facilitate commerce, investments, and enterprise. They are typically businesses, charities, or other groups that operate under the law. The creation of an artificial person allows for greater flexibility and protection for individuals pursuing collective goals.
Artificial persons have rights such as owning property, entering into contracts, and taking legal action, including the ability to sue and be sued. They also have the right to initiate legal proceedings and be held liable for their actions. This liability is a key aspect of artificial persons, as it distinguishes their obligations from those of the individuals who create or run them, providing legal protection for the individuals.
While artificial persons have many rights similar to those of natural persons, they also have limitations. They do not possess inherent human rights such as the right to life, liberty, and political participation. Artificial persons cannot vote or marry, for example. These restrictions ensure that the obligations and privileges of artificial persons do not conflict with those of human beings.
Artificial persons have duties and responsibilities in addition to their rights. They must comply with various laws and regulations, including labour, environmental, and securities regulations. They are also subject to reporting obligations, such as maintaining financial records, submitting tax filings, and disclosing material changes to governing bodies. Non-compliance can result in fines or the removal of corporate protections.
The concept of artificial persons is fundamental to modern corporate law and is recognised in most jurisdictions. It allows companies to operate as separate legal entities, independent of their shareholders, directors, and founders. This legal distinction enables companies to function with a degree of autonomy and facilitates their participation in commerce and law.
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Creation and dissolution of artificial persons
An artificial person, also known as a juridical person, is a non-human legal entity that has a legal name and rights, protections, privileges, responsibilities, and liabilities in law, similar to those of a natural person. In other words, it is an organisation recognised by law as a fictitious person. The concept of a juridical person is now central to Western law in both common-law and civil-law countries and can be found in virtually every other legal system.
The creation of an artificial person is a legal process that involves registering a company, thereby giving it a separate legal personality. This process is typically initiated by filing the necessary documents with a governmental body, such as the registrar of companies. Once incorporated, a company is recognised as a separate legal entity, distinct from its founders, shareholders, directors, and members. This separation allows the company to enter into contracts, own property, carry out business activities, and take legal actions independently.
The dissolution of an artificial person refers to the legal process by which a company ceases to exist. This process is often outlined in national laws and statutes that govern the rights and obligations of companies. In some cases, non-compliance with reporting obligations, such as maintaining financial records, submitting tax filings, and disclosing material changes, can also result in the dissolution of an artificial person.
It is important to note that artificial persons have certain limitations and restrictions on their rights and obligations. While they can own property, enter into contracts, and be held liable for debts, they do not have personal rights like voting or marriage. Additionally, they are subject to fiduciary duties, regulatory compliance, and tax obligations.
The concept of an artificial person is fundamental to modern corporate law, allowing companies to operate with legal independence and facilitating commerce, investments, and enterprise. It provides a legal framework for the management, liabilities, and operations of companies, ensuring they function within the boundaries of the law.
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International organisations as artificial persons
An artificial person, also known as a juridical person, is a non-human legal entity that is recognised by law as having a legal personality or personhood. In other words, it is an organisation that has a legal name and has certain rights, protections, privileges, responsibilities, and liabilities in law, similar to those of a natural person.
In the international legal system, various organisations possess legal personality. These include intergovernmental organisations (the United Nations, the Council of Europe) and some other international organisations (including the Sovereign Military Order of Malta, a religious order). The European Union (EU) has legal personality since the Lisbon Treaty entered into force on 1 December 2009. That the EU has legal personality is a prerequisite for the EU to join the European Convention on Human Rights (ECHR). However, in 2014, the EU decided not to be bound by the rulings of the European Court of Human Rights.
The concept of legal personhood for organisations of people is not new and can be traced back to Ancient Rome, where a variety of collegial institutions enjoyed the benefit under Roman law. In modern times, the concept of a company as an artificial person created by law is fundamental to corporate law. It signifies that a company, once incorporated, attains a legal status separate from its shareholders, directors, and members. This legal distinction allows the company to enjoy rights and bear obligations in its name, facilitating commerce, investments, and enterprise.
International organisations, such as the United Nations and the European Union, are artificial persons created by law. They are recognised as having legal rights and duties, despite not being human beings. This allows them to act as a single entity for legal purposes and facilitates their ability to sign international treaties in their own name. The global governance of artificial intelligence (AI) has also emerged as a prominent topic in academia, with considerable attention given to its intersection with international organisations.
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Frequently asked questions
An artificial person, also known as a juridical person, is a non-human entity that has a legal status and rights similar to those of a natural person.
Examples of artificial persons include corporations, limited liability companies, and intergovernmental organizations such as the United Nations.
The concept of an artificial person allows for the creation of legal entities that can operate independently of their owners or members. This facilitates commerce, investments, and enterprise on a large scale.
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