New Sun College Business Law

Chapter Two

2. The Concept of Legal Personality

Definition of Legal Personality

A person, in the first instance, is a human being, who is an individual member of society and
it also refers to an entity (such as a corporation) that is recognized by law as having the rights
and duties of a human being.

Persons are the substances of which rights and duties are the attributes. It is only in this
respect that persons possess juridical significance, and this is the exclusive point of view
from which personality receives legal recognition.

A person is a being or an entity that possesses rights and duties or is a subject of rights and
duties before the eyes of the law. What awards a being the status of a person is not the fact
that it is having two eyes or two legs like a physical person but it is rather whether it is the
possessor of rights and the subject of duties or not. (Refer to article 1 of the Civil Code of
Ethiopia 1960)

Legal personality is the legal status of one regarded by the law as a person. It is the legal
conception by the law regards a human being or an artificial entity as a person. Personality is
a particular device by which the law creates or recognizes units to which it ascribes certain
powers and capacities.

Legal personality is the attribute feature of being the subject of rights and duties before the
eyes of the law. If one is the subject of rights and duties, it is a person and the process is
called legal personality.

Types of Persons
There are two types of persons recognized by the law. These are:
Natural and Artificial Person.

Natural person;
A natural person is a human being, as distinguished from an artificial person created by law,
who is an individual member of society. A natural person is a being that is born physically in
the appearance of a human being.
At present, every human being is considered as a person, before the eyes of the law, without

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the fulfillment of any other additional subjective requirement. Or, when a person is born
physically, legal personality is presumed to it or automatically conferred upon it.

Therefore, when a person is born physically, s/he is also born legally. Legal personality
would be conferred on every physical person automatically upon birth. Hence, every physical
person is the possessor of rights and duties from the moment of its birth up until its death.
(Refer to articles 1-7 of the Civil Code of Ethiopia 1960)

Artificial Persons

Artificial persons are entities such as companies (corporations) or associations and so on

created by law and given certain legal rights and duties of a human being. An artificial person
is a being, real or imaginary that for various legal purposes is treated more or less as a human
being. Such persons are also known as fictitious persons (for their existence is fictitious),
legal persons, or moral persons. (Refer to articles 394 -549 of the Civil Code of Ethiopia)

Legal personality is not conferred on them naturally. Hence, personality is not presumed to
them. Legal personality is given to them by law, artificially, for the sake of convenience in
control and upon the fulfillment of certain legal requirements such as application to the
required office, registration, publications, legality of the object of incorporation, and so on.

Physical persons exist in reality, and we can see and touch one another. However, juridical
persons are creations of the human mind. It is to be noted that juridical persons are different
from the „managers‟ and „employees‟ who work for them. They are also different from the
buildings‟ they use as premises because such premises are analogous to the houses where
physical persons live in. Although we cannot empirically touch, see, and perceive juridical
persons, we can conceive them as entities. Moreover, the term “persons” attached to them
signifies the fact that they take part in legal relations or juridical activities.

The legal recognition of entities other than physical persons became necessary when they
started to take part in juridical relations as entities separate and distinct from their owners or
members. Such entities acquire personality upon recognition by domestic laws and upon their
subsequent establishment, registration, and publicity as the case may be. The development of
international law has further widened the scope of juridical personality in the international

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arena. Accordingly, States and international organizations, for example, have international
legal personalities.

Dear student, be aware that, for their personality is given to them by law, upon the fulfillment
of certain legal requirements, it may also be withdrawn by law for failure to keep up with
these requirements set by law.

In conclusion, artificial persons are the subject of rights and duties from their formation
(registration and publication) to their liquidation (winding up).

The following are typical examples of artificial persons: Companies (share companies or
private limited companies), Hotels, Religious Organizations (such as the Ethiopian Orthodox
Church or the Ethiopian Islamic Council), and Government Ministries.
The Beginning of Legal Personality

Article 1 of the Civil Code of Ethiopia dictates that the human person is the subject of rights
and duties from its birth to its death. To understand this provision we need to define each
element of the article turn by turn. Accordingly, „birth‟ can be defined as the culmination of
pregnancy or the cutting (severing) of the umbilical cord or the complete extrusion of the

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baby (child) from its mother‟s womb (uterus) naturally or via a C-section. Or, we say a child is
born when the child begins an independent existence, by itself, in the real world by taking
advantage of its internal bodily organs.

A „right‟ can also be defined as the legal ability or capacity, entitlement, or privilege to do
something (rights-in-rem- or rights to be exercised concerning a thing e.g. a chair) or to
prohibit others from doing something (rights-in- personam- rights to be exercised against a
person). For example, the right to own and administer property is a typical example of a right.

On the other hand, a „duty‟ is a certain legal or contractual obligation that has to be
discharged accordingly or otherwise constitutes a fault and entails legal liability. A typical
example in this regard would be the duty to pay taxes or to maintain the elderly.

Moreover, „death‟ can be defined as the complete metabolic (bodily) breakdown or collapse
of a human person or we say a physical person is dead when his/her heart stops beating or the
lung stops functioning, or both.

In conclusion, for physical persons, the status of being a person before the eyes of the law is
given naturally (via the instrumentality of birth) and it would only be taken away naturally by
death.

Article 2 of the Civil Code of Ethiopia stipulates the exception rule to the principle stated
under article 1 of the same code. Article 2 dictates that „a child merely conceived shall be
deemed as though born whenever its interest so demands provided that it is born alive and
viable‟.

According to this article, the law does not only confer the status of being a person after birth
but also exceptionally before birth upon the fulfillment of three complementary requirements.
These are:

1. Conception: per article 3 of the same code, a child is deemed to have been conceived on
the 300th day, which precedes its birth.

2. There needs to be an interest (mostly economic) of the fetus to be protected in its favor
even though, it is yet to be born. For instance, the right to succession or a donation is
typical in this regard. The presumption of the law seems that if the child is to be born
after nine months why it should be precluded from enjoying its rights merely because it is
yet to be born. And,

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3. The child should be born (when it is born) „alive‟ and „viable‟. I.e., when the child is born
after the completion of pregnancy it should be born alive.

Dear student, according to the third requirement a child merely conceived shall not be
considered a person unless it is born:

a. Alive: to be born alive means, being born with a functioning lung or with a breath or as
different from a stillbirth. And,

b. Viable: a child shall be viable means it should be born, as a person, with the potential
(physical requirements) to survive in the future. However, the technical definition of viability
is stipulated under article 4 of the Civil Code of Ethiopia. The article stipulates that:

4 (1): a child shall be deemed to be viable where it lives for 48 hours (at least) after its birth,
notwithstanding any proof to the contrary. Hence, it is considered as a person, and its interest,
if any, is protected if and only if it lives at least 48 hours after its birth.

4 (2): a child shall be deemed to be not viable if it dies less than 48 hours after its birth and
the cause of death is an „internal‟ or „natural‟ factor or due to a deficiency of bodily
constitution, such as cancer or HIV. Hence, it is not considered a person and its interest
would not be protected. Be reminded that if a child becomes not viable, it will be considered
for all legal purposes never to have been born. And,

4 (3): a child shall be exceptionally deemed to be viable where it dies less than 48 hours after
its birth and the cause of death is an „external‟ factor or a factor other than the deficiency of
its internal bodily constitution such as an accident. This is because the presumption of the law
becomes had it not been for the external factors that caused the death the child would have
survived and become viable. Hence, in this case, though the child died in less than 48 hours,
the child would be exceptionally considered viable and considered as a person, and its
interest, if any, would be protected.

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The Attribute Features of Legal Personality

Dear student, by the attribute features of legal personality we are referring to those
characteristics or attributes that distinguish beings endowed with a legal personality from
beings with no legal personality. Accordingly, the following are the typical attribute features
of legal personality:

1. The right to have a name (to be named) to be identified by it: If one is not a person, s/he
cannot use their name for the intended purpose. Ethiopian law recognizes a three-degree
naming scheme, which consecutively includes, First name, Father‟s name, and Grand
father‟s name.

2. The ability to sue or be sued by its name.

3. The ability to own and administer property: The property can be movable or immovable,
tangible or intangible.

4. The ability to engage in a Juridical Act (an act bound by the law), such as concluding a
contract, issuing a „Will‟, and so on.

5. The obligation (duty) to pay taxes or to discharge other duties as per the conditions
prescribed by law.

Exercise
Dear student, can you enumerate additional attribute features of legal personality?

The Fundamental Nature of Legal Personality

Legal personality is so fundamental to a person‟s meaningful existence that creates legal

bondage (connection/ attachment) between the individual and the laws and opportunities that
are available to him or her in a certain country where s/he is living. Consequently, if one does
not have a legal personality, s/he is not considered as a person or there is no legal recognition
as to his or her existence and his /or her existence becomes remedy-less before the eyes of the
law of that particular state.

As we have discussed earlier what makes a being qualify to be considered, as a person is not
the fact that it has a particular type of physical appearance but whether it is practically the
subject of rights and duties before the eyes of the law. If not, it will not have legal personality
and the immediate consequence of the absence of legal personality is the inability to be the

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subject of rights and duties before the eyes of the law. Therefore, you should be aware that the
concept of legal personality is so fundamental and a necessary condition for the applicability
of the rest of the laws in a country that it is treated as the first crucial subject matter under the
very first article of the Civil Code of Ethiopia 1960.

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