Jurisprudence
Legal Personality
At a Glance ▪ A legal person is any being the law treats as capable of rights and duties. Personality is a status the law confers or recognises; it is not the same thing as being human. ▪ Persons are natural (human beings) or legal, juristic or artificial (companies, the State, an LLP, a Hindu idol, the Guru Granth Sahib). A partnership firm, a trust and a Hindu undivided family are not juristic persons in the strict sense. ▪ The theories of corporate personality: fiction (Savigny), concession (Dicey, Hobbes), bracket or symbolist (Jhering), purpose (Brinz), realist (Gierke, carried into English by Maitland), and the analytical views of Kelsen and Hohfeld. ▪ Salomon v Salomon (House of Lords, 1897) made the company a person separate from its members. Courts lift the veil only exceptionally: enemy character (Daimler, 1916), sham (Gilford Motor v Horne, 1933), evasion of an existing obligation (Prest v Petrodel, 2013). ▪ A Hindu idol is a juristic person and a perpetual minor acting through its shebait; Ram Lalla is a juristic person but the Janmasthan is not (M. Siddiq, 2019). A mosque was not treated as a juristic person able to sue (Masjid Shahid Ganj, Privy Council 1940). |
Think of a bank. It does not care whether a customer breathes, thinks or feels; it cares only whether an account has been opened in that name, so that money can be credited and debited. A person in law is an account opened by the legal system, in which rights are credited and duties debited. A living human being has such an account today, but a slave in Rome did not. A company, which has no body at all, does. A Hindu idol has one, operated by its shebait. This note explains who holds such an account, why the law opens it, and the theories that try to explain it.
Figure: The corporate veil: the company as a legal person separate from its members, and the exceptional grounds on which courts lift the veil
1. The Meaning of Legal Personality
The word person comes from the Latin persona, the mask worn by an actor on the Roman stage, and so the role he played. The legal meaning keeps that idea: a person is a character in the legal drama, a unit to which the law assigns rights and duties. For analytical jurists personality is therefore a matter of capacity, not of nature.
Classic Definitions ▪ Salmond (Jurisprudence): 'So far as legal theory is concerned, a person is any being whom the law regards as capable of rights and duties. Any being that is so capable is a person, whether a human being or not, and no being that is not so capable is a person, even though he be a man.' ▪ Gray (The Nature and Sources of the Law, 1909): a person is an entity to which rights and duties may be attributed; Gray discussed whether animals, the dead and supernatural beings can be subjects of rights. ▪ Holland (Elements of Jurisprudence): persons are beings, human or otherwise, capable of rights and liable to duties; he divided them into natural and artificial persons. ▪ Paton (A Text-Book of Jurisprudence): legal personality is the particular device by which the law creates or recognises units to which it ascribes certain powers and capacities. ▪ Kelsen (Pure Theory of Law): the person, natural or juristic, is only the personification of a complex of legal norms, a point to which rights and duties are imputed. |
Two consequences follow from Salmond's definition. First, being human is neither necessary nor sufficient: a company is a person though not a man; a Roman slave was a man though not a person. Second, personality is always relative to a particular legal system: Hindu law treats an idol as a person, English law does not. The purpose of the device is practical. It lets the law treat a group, a fund or an office as one unit that can own property, contract, sue and be sued, and outlive the individuals behind it.
2. Natural and Legal Persons
Natural persons are human beings recognised by law; the law fixes when personality begins and ends and limits the capacity of minors and persons of unsound mind. Legal persons (juristic, artificial or fictitious persons) are beings other than humans to which the law gives personality. Salmond's list covers corporations, institutions, funds or estates dedicated to purposes and, in systems such as Hindu law, idols. A legal person always acts through human agents: directors, trustees, a shebait or officers of the State.
Basis | Natural person | Legal (juristic) person |
|---|---|---|
What it is | A human being recognised by law | A being other than a human being given personality by law |
Source of personality | Recognised by law; exists in nature | Created or recognised by law (statute, charter, judicial recognition) |
How it acts | By its own will and body | Through human agents or representatives |
Duration | Birth to death | Perpetual succession until dissolved |
Rights it can hold | All rights, including family rights | Only rights consistent with its nature: no marriage, no vote |
3. The Borderline Cases
The unborn child. A child in the womb is not yet a person, but the law protects its expected personality. Section 20 of the Hindu Succession Act, 1956 lets a child in the womb at the intestate's death, later born alive, inherit as if born before the death. Section 13 of the Transfer of Property Act, 1882 permits a transfer for the benefit of an unborn person, subject to a prior interest. Causing miscarriage is an offence (formerly Section 312 IPC). All these rights depend on live birth.
The dead. Personality ends at death, but Salmond notes that the law protects three interests connected with the dead: the body (decent burial), the reputation (imputations against a deceased person can be defamation: Explanation 1 to the former Section 499 IPC) and the estate (the will is carried out). These are really duties owed to the living and the public, not rights of the dead.
Animals. Medieval Europe held trials of animals, prosecuting and sometimes executing pigs and bulls. Modern law protects animals without making them persons: duties under the Prevention of Cruelty to Animals Act, 1960 are owed to the State. In Animal Welfare Board of India v A. Nagaraja (Supreme Court, 2014), the jallikattu case, the Court read that Act with Art. 51A(g) and spoke of the 'five freedoms' of animals, but Indian law has not generally made animals right-bearing persons.
Slaves and civil death. In Roman law a slave was a thing (res), not a person. Medieval English law knew civil death: a man who entered a monastery or was attainted of felony was treated as dead in law. Both are the classic illustrations of Salmond's words 'even though he be a man'.
4. The Kinds of Juristic Person
Corporations and other legal persons ▪ Corporation sole. An office held by one person at a time, treated as a perpetual person distinct from its holder: the Crown, a bishop; in India, for example, the Official Trustee. When the holder changes, the property stays with the office. ▪ Corporation aggregate. A group united into one body distinct from its members: a registered company, a municipal corporation, a university, a statutory corporation such as the LIC. ▪ Limited liability partnership. Under Section 3 of the LLP Act, 2008 an LLP is a body corporate, a legal entity separate from its partners, with perpetual succession. An ordinary partnership firm is not: 'the firm' is only a collective name for the partners. ▪ The State. A juristic person. Art. 300 provides that the Government of India may sue and be sued by the name of the Union of India, and a State Government by the name of the State. ▪ Religious entities. A Hindu idol is a juristic person, and so is the Guru Granth Sahib (Section 7). ▪ Not persons. A trust (the trustees hold the property), a Hindu undivided family (a taxable unit, not a juristic person) and an unregistered association, though statutes may treat them as units for particular purposes. |
5. Theories of Corporate Personality
If a company has no body and no mind, what exactly is the person the law recognises? Examiners test the pairing of theory and name, so learn them together.
Fiction theory. Only human beings are real persons; the corporation is a fiction the law adopts for convenience. The idea of the corporation as a persona ficta is usually traced to Pope Innocent IV in the thirteenth century, who reasoned that a corporation, having no soul, could not be excommunicated. Savigny gave the theory its classic form, and Salmond accepted it in England. Its weakness is that it does not say who really acts when a company does wrong.
Concession theory. Allied to the fiction theory, it stresses the source: a corporation is a person only because, and so far as, the State concedes personality to it. Hobbes distrusted corporations, likening them to worms in the entrails of the commonwealth, and Dicey is cited for the view that corporate personality depends on State grant. It explains incorporation by registration, but can justify State control of every association.
Bracket or symbolist theory. Jhering (also spelt Ihering) held that the members are the real holders of rights; the corporate name is only a bracket placed around them for convenience, as in algebra. Lifting the veil is simply removing the bracket. The theory suits small companies but not one whose shares change hands every second.
Purpose theory. Brinz held that corporate property belongs to no person at all: it is property dedicated to a purpose (Zweckvermögen), rights without a subject. It fits foundations and endowments, but abandons the idea of a corporate person.
Realist theory. Gierke, in Das deutsche Genossenschaftsrecht, argued that a group with a common will and life of its own is a real person; the law recognises rather than creates it. Maitland translated part of that work as Political Theories of the Middle Age (1900) and became the leading English advocate of realism. Critics say it confuses a social fact with a legal status.
Analytical views. Kelsen dissolves the problem: every person is a legal construct, the natural person personifying the norms that govern one individual, the juristic person personifying a partial legal order such as a company's constitution. Hohfeld held that a corporation's rights and duties can be analysed into the jural relations of natural persons: members, directors, creditors. Hart (Definition and Theory in Jurisprudence, 1953) advised against asking 'what is a corporation?' in the abstract, and urged that we explain how the word works in legal statements.
Theory | Proponents | Core claim |
|---|---|---|
Fiction | Savigny; persona ficta traced to Innocent IV | Only humans are real persons; the corporation is a legal pretence |
Concession | Dicey, Hobbes | Personality is a grant of the State, existing only so far as granted |
Bracket or symbolist | Jhering | The members are the real persons; the name is a bracket around them |
Purpose | Brinz | Corporate property is ownerless property dedicated to a purpose |
Realist or organic | Gierke; Maitland in England | The group is a real person with its own will; law recognises it |
Analytical | Kelsen; Hohfeld | All persons are legal constructs or bundles of human jural relations |
No theory has been adopted by the courts. In practice the law uses whichever picture fits the problem: the fiction or concession picture when it insists on separate personality, the bracket picture when it lifts the veil.
6. The Corporate Veil and Its Lifting
Salomon v A. Salomon and Co. Ltd. House of Lords, 1897 Aron Salomon sold his boot business to a company in which he held almost all the shares, his wife and children holding one each, and took secured debentures. When the company failed, the House of Lords held that a company duly incorporated is a separate legal person, even where one man controls it, so Salomon ranked as a secured creditor ahead of the unsecured creditors. This is the foundation of the corporate veil. |
The veil is not absolute. In Daimler Co. v Continental Tyre and Rubber Co. (House of Lords, 1916), a company registered in England but controlled by Germans could have an enemy character in wartime, so the court looked at who controlled it. In Gilford Motor Co. v Horne (Court of Appeal, 1933), a former managing director bound not to solicit customers set up a company to do so; the company was a mere sham and was restrained with him. In Prest v Petrodel Resources Ltd. (UK Supreme Court, 2013), Lord Sumption confined true piercing to the evasion principle: where a person under an existing legal obligation deliberately evades it by interposing a company he controls. Mere concealment is not enough. The veil was not pierced there, but the wife still obtained the properties because the companies held them on trust for the husband.
LIC v Escorts Ltd.; DDA v Skipper Construction Co. Supreme Court of India, 1986 and 1996 In LIC v Escorts the Court held that the veil may be lifted where a statute requires it, where fraud or improper conduct is intended, or where associated companies are really parts of one concern, and declined to make the list exhaustive. In Skipper Construction a developer and his family used a web of companies to defraud buyers and the DDA. The Court lifted the veil and treated family and companies as one, so their properties could be attached. The corporate form cannot be used to defraud creditors or defeat court orders. |
7. Religious Entities and Companies in Indian Law
Property dedicated to a deity vests in the idol as a juristic person in an ideal sense; possession and management lie with the shebait, who acts for it. Because the idol cannot act for itself, it is treated as a perpetual minor.
Pramatha Nath Mullick v Pradyumna Kumar Mullick Privy Council, 1925 A Hindu idol is a juristic entity with the power of suing and being sued, having in law a will of its own expressed through its shebait. In a dispute over removing the idol, the Board directed that it be represented by a disinterested next friend. |
Deoki Nandan v Murlidhar; Bishwanath v Sri Thakur Radha Ballabhji Supreme Court of India, 1957 and 1967 Deoki Nandan: the idol owns dedicated property only in an ideal sense; the real beneficiaries of a public endowment are the worshippers. Bishwanath: the idol is in the position of a minor, so where the shebait himself alienates its property a worshipper may sue on its behalf. |
Yogendra Nath Naskar v Commissioner of Income Tax Supreme Court of India, 1969 A Hindu idol is a juristic entity capable of holding property and of being taxed through its shebaits, falling within the word 'individual' in the income tax law. |
Shiromani Gurdwara Prabandhak Committee v Som Nath Dass Supreme Court of India, 2000 The Guru Granth Sahib, revered as the living Guru, is a juristic person. The juristic person recognised was the Guru Granth Sahib, not the Gurdwara as a building. |
Masjid Shahid Ganj v Shiromani Gurdwara Prabandhak Committee Privy Council, 1940 A suit was brought in the name of a Lahore mosque long in Sikh possession. The Privy Council did not treat the mosque as a juristic person able to sue and held the claim defeated by adverse possession. The idol doctrine was not extended to a mosque. |
M. Siddiq v Mahant Suresh Das (Ayodhya) Supreme Court of India, 2019 (5 judges) Ram Lalla Virajman, the deity, is a juristic person, but the Janmasthan (birthplace) is not. Giving personality to land would put it beyond the ordinary rules of title and limitation. |
State Trading Corporation v CTO; TELCO v State of Bihar Supreme Court of India, 1963 and 1965 A company is a person but not a citizen, so it cannot claim the Art. 19 rights confined to citizens; in TELCO the Court refused to lift the veil to let it claim through its citizen shareholders. Later, in R.C. Cooper (1970), shareholders whose own rights were affected were allowed to sue. |
8. New Frontiers: Rivers and Artificial Intelligence
New Zealand's Te Awa Tupua (Whanganui River Claims Settlement) Act, 2017 declared the Whanganui River a legal person with guardians to speak for it. In India, the Uttarakhand High Court in Mohd. Salim v State of Uttarakhand (2017) declared the Ganga and Yamuna legal and living entities with officials as guardians in loco parentis; the Supreme Court stayed that order. The debate is whether river personhood is a useful device for standing, or a category mistake that creates a person unable to bear duties (who pays when a river floods?).
On artificial intelligence, Thaler v Comptroller-General of Patents (UK Supreme Court, 2023) held that an AI system (DABUS) cannot be an inventor under the Patents Act 1977: an inventor must be a natural person. Proposals for 'electronic personhood' have been discussed but not adopted. Kelsen's view frames the question well: the law may impute rights and duties to anything it chooses, so the real issue is who should bear the liability. Admiralty's old action in rem against a ship shows the law has long attached quasi-personality to things for convenience.
Memory Aid ▪ Analogy: the bank account. Personality is an account the legal system opens. Humans get one at birth and it closes at death; a company gets one on registration; an idol's account is operated by the shebait as guardian of a perpetual minor. ▪ Theories: 'Some Dogs Jump By Gates'. Savigny = fiction; Dicey = concession; Jhering = bracket; Brinz = purpose; Gierke = realist (Maitland his English translator). ▪ Veil cases in date order (1897, 1916, 1933, 2013): 'Separate, Daimler, Gilford, Prest'. Separate person; enemy character; sham; evasion principle. |
Exam Corner: Likely Questions ▪ 'A person is any being whom the law regards as capable of rights and duties.' Explain Salmond's definition with reference to natural and legal persons. ▪ Critically examine the theories of corporate personality. Which best explains lifting the corporate veil? ▪ Discuss the legal status of a Hindu idol with reference to Indian case law. Is a mosque or a Gurdwara a juristic person? ▪ Can rivers, animals or artificial intelligence be legal persons? Discuss. |
Exam Corner: MCQ Traps ▪ Bracket (symbolist) theory is Jhering; purpose theory is Brinz; realist theory is Gierke; fiction theory is Savigny. ▪ The mosque case went the other way: in Masjid Shahid Ganj (Privy Council, 1940) the mosque was not treated as a juristic person able to sue. ▪ In Som Nath Dass (2000) the juristic person was the Guru Granth Sahib, not the Gurdwara. In M. Siddiq (2019) Ram Lalla was a juristic person, the Janmasthan was not. ▪ An LLP is a body corporate (Section 3, LLP Act 2008); a partnership firm is not a juristic person. ▪ A company is a person but not a citizen (State Trading Corporation, 1963; TELCO, 1965). |
9. Frequently Asked Questions
Q. Why is a Hindu idol called a perpetual minor?
A. Because it can hold property but cannot act for itself. Like a minor it acts through a guardian, the shebait, and where the shebait acts against its interests a worshipper or next friend may sue for it (Bishwanath, 1967).
Q. When will a court lift the corporate veil?
A. Only exceptionally: where a statute requires it, where the company is a sham or used for fraud, to find enemy character in wartime, or (in the narrow English test of Prest v Petrodel, 2013) to stop a person evading an existing obligation through a company. LIC v Escorts (1986) and DDA v Skipper Construction (1996) are the Indian authorities.
Q. Can an AI be a legal person?
A. Not under present law. In Thaler v Comptroller-General (UK Supreme Court, 2023) an AI could not be named as an inventor because an inventor must be a natural person. Whether AI should receive some form of personality is a policy debate.
See also: Note 28 (rights and duties), Note 31 (ownership), Note 34 (liability, including corporate liability), Note 12 (Kelsen), Note 36 (title).
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