Legal personality: natural and juristic persons

1. Meaning of person

Salmond: “A person is any being whom the law regards as capable of rights and duties.” Any being so capable is a person, whether a human being or not, and no being that is not so capable is a person, even if he is a man. Personality in law is therefore a legal status, not a biological fact. Slaves in Roman law were human beings but not persons; a company is not a human being but is a person.

Indian statutes define the word inclusively. Section 3(42) of the General Clauses Act, 1897 says that “person” shall include any company or association or body of individuals, whether incorporated or not, and section 2(26) of the Bharatiya Nyaya Sanhita, 2023 defines “person” to include any company or association or body of persons, whether incorporated or not.

2. Kinds of persons

• Natural persons: human beings, from birth (and for some purposes before birth) to death. Their status is discussed in the next note.
• Legal (juristic, artificial) persons: beings, real or imaginary, to which the law attributes personality. Salmond groups them as:
  • corporations, the main class;
  • institutions, such as a university, hospital or library, personified in some legal systems;
  • funds or estates dedicated to special uses, such as a trust estate or the estate of a deceased person or of an insolvent;
  • and, in Indian law, idols and religious endowments.

3. Corporations

• Corporation aggregate: a group of persons incorporated as one legal person, such as a company, a university, a municipal corporation.
• Corporation sole: a single office holder incorporated so that the office continues though the holder changes: the Crown in England, a bishop, and in India offices such as the Treasurer of Charitable Endowments or the Official Trustee.

The consequence of incorporation is separate legal personality. In Salomon v. A. Salomon and Co. Ltd. (House of Lords, 1897), Salomon sold his business to a company in which he held nearly all the shares and took secured debentures. When the company failed, the unsecured creditors claimed that the company was only Salomon under another name. The House of Lords held that the company was a person distinct from its members, and Salomon, as a secured creditor, was entitled to be paid first. Courts may “lift the corporate veil” where the form is used for fraud or to evade law.

4. Theories of corporate personality

• Fiction theory (Savigny, Salmond, Coke). A corporation is a fiction of law; it has no real will or existence, and the law treats it as a person only for convenience. Criticism: it does not explain why the corporation’s acts and liabilities are real, or how a fiction can commit a crime.
• Concession theory (Savigny, Dicey). A corporation has personality only because the State has conceded it. It explains the State’s power to create and dissolve corporations, but does not explain unincorporated bodies that act as units.
• Realist theory (Gierke, Maitland). A corporation is a real person with a real will, the group-will of its members, which exists independently of the State. The law only recognises what already exists. Criticism: the group-will is a metaphor; a company acts only through human agents.
• Bracket (symbolist) theory (Ihering). Only the members are persons; the corporate name is a bracket placed around them for convenience, and the bracket can be removed to find the real persons behind it. It anticipates the lifting of the veil, but ignores the independent existence of the company.
• Purpose theory (Brinz). Juristic persons are not persons but property dedicated to a purpose; the “person” is the purpose. It fits charitable foundations and idols better than trading companies.

No single theory explains every juristic person. The modern view is that legal personality is a technical device, given by law to whatever entity the law finds convenient.

5. Juristic persons in Indian law

• The Hindu idol. In Pramatha Nath Mullick v. Pradyumna Kumar Mullick (Privy Council, 1925) the idol was held to be a juristic entity with a will of its own, which the shebait expresses; it could sue through a next friend to prevent its removal. In Yogendra Nath Naskar v. Commissioner of Income-tax, 1969 INSC 47, (1969) 1 SCC 555, the Supreme Court held that a Hindu deity is a juristic person capable of holding property, and assessable to income tax through its shebait.
• The Guru Granth Sahib. In Shiromani Gurdwara Parbandhak Committee v. Som Nath Dass, 2000 INSC 166, (2000) 4 SCC 146, the Court held that the Guru Granth Sahib, which is revered as the Guru, is a juristic person and can hold property.
• Limits. In M. Siddiq v. Mahant Suresh Das, 2019 INSC 1231, (2020) 1 SCC 1 (the Ayodhya case), the Constitution Bench held that the deity Ram Lalla is a juristic person, but declined to treat the land, Ram Janmabhumi, as one. Personality is conferred for a purpose (to hold property and to protect the interest of devotees) and is not extended to immovable property itself.
• Animals and rivers. In Animal Welfare Board of India v. A. Nagaraja, 2014 INSC 370, (2014) 7 SCC 547 (the jallikattu case), the Court read the Prevention of Cruelty to Animals Act, 1960 with Article 51A(g) to recognise rights of animals against unnecessary pain, without declaring them persons. The Uttarakhand High Court in 2017 declared the Ganga and Yamuna to be legal persons; that order was stayed by the Supreme Court the same year.
• Others: companies under the Companies Act, 2013, statutory corporations, registered trade unions, co-operative societies, municipal bodies, and the Union and the States under Article 300.

How this is examined

As an essay: “Define person. Explain the nature of legal personality” or “Examine the theories of corporate personality.” The definition part of “Define person. Explain the legal status of an unborn child” (February 2025, Q.4(a)) also comes from here. Give Salmond’s definition, the kinds, the five theories with a criticism each, and the Indian cases on the idol, the Guru Granth Sahib and Ayodhya.