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The Concept of the Separate Legal Personality of a Company


A legal person from a legal point means all human beings and the capacity that they have to acquire legal rights and incur legal duties. However, the essential difference between a legal person and a human person is that a legal person is merely a legal concept and has no physical existence. A legal or juristic person cannot perform acts which are human in nature, for example, entering into a marriage or becoming a guardian for a minor. Even though a legal person is a legal concept, it does have its own legal personality and can acquire rights and incur obligations which are separate from those of the Directors and Shareholders. A company is a separate legal person, distinct from its shareholders and directors. From the date that the company has been registered, it has all the legal powers and capacity of an individual, except to the extent that a juristic person is incapable of exercising any such power or having such capacity.

A registration certificate will then be issued by the Companies Commission (CIPC) and is evidence that:

  1. The requirements for the incorporation of a company have been complied with; and

  2. The company is incorporated under the Act as from the date and time stated on the certificate.

Once a registration certificate has been issued, the company acquires its own separate legal personality.

The separate legal personality of a company means that:

  1. Shareholders have limited liability;

  2. Property and assets of a company belong to the company;

  3. Profits belong to the company;

  4. Debts and liabilities of the company belong to the company;

  5. Shareholders have no right to manage the business or enter into Transactions on behalf of the company

  6. A company may enter into contracts with its shareholders because it’s a person separate from its shareholders;

  7. A company may sue or be sued in its own name;

  8. A company enjoys perpetual succession.

If you would like to find out more information on how to register a Company or require any other Company Secretarial information please contact us Myers Attorneys on (011) 346 2422 or reception@myersattorneys.co.za

Or visit our website www.myersattorneys.co.za

#LegalEntity #CompanyLaw #CompaniesAct

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