SCHOOL OF LAW

TOPIC- THEORIES OF LEGAL PERSONALITY

SUBMITTED BY :
DIVYANSHA GOYAL
PERSON
ACCORDING TO SALMOND A PERSON IS ANY BEING WHOM THE LAW REGARDS AS
CAPABLE OF RIGHTS OR 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 .PERSONS ARE THE SUBSTANCES OF WHICH
RIGHTS AND DUTIES ARE THE ATTRIBUTES .IT IS ONLY IN RESPECT THAT PERSON
POSSESSES JURIDICAL SIGNIFICANCE AND THIS IS THE EXCLUSIVE POINT OF VIEW
FROM WHICH PERSONALITY RECEIVES LEGAL RECOGNITION.
A PERSON MAY BE DIVIDED INTO 2 KINDS –
1. NATURAL PERSON ( LIVING HUMAN BEING)
2. LEGAL PERSON (IMAGINARY BEING)
THEORIES OF LEGAL PERSONALITY
• FICTION THEORY
• CONCESSION THEORY
• PURPOSE THEORY
• BRACKET THEORY
• REALIST THEORY
 FICTION THEORY
• SUPPORTED BY VON SAVIGNY, COKE, SALMOND AND HOLLAND.

• WHICH SAYS THAT A PERSONALITY IS ATTACHED TO GROUPS AND INSTITUTION BY

A PURE LEGAL FICTION AND THIS PERSONALITY IS DISTINCT FROM PERSONALITY IS
DISTINCT FROM PERSONALITY OF THE INDIVIDUAL BEING.

• NOT BEING A REAL PERSON, THE CORPORATION CANNOT HAVE ANY

“PERSONALITY” OF ITS OWN. IT HAS NO WILL , NO MIND, NO ABILITY TO ACT. IT
CAN HAVE ONLY SO MUCH AS THE LAW IMPUTES AS IT BY A FICTION AS THOUGH
IT WERE A MERE REAL PERSON.
• ONE OF THE DEDUCTION OF FICTION THEORY IS THAT A CORPORATION
COULD NOT MAKE ITSELF LIABLE FOR CERTAIN KINDS OF LEGAL WRONGS,
CERTAINLY IT COULD NOT COMMIT A CRIME INVOLVINGANY MENTAL
ELEMENT. THUS THE DOCTRINE OF ULTRA VIRUS IS A DEDUCTION FROM
THE FICTION THEORY BECAUSE CORPORATION CANNOT GO OUTSISE ITS
MEMORANDUM OF ASSOSSIATION.

• THE FAMOUS CASE OF SALOMON V, SALOMON CO. LTD IS A PROOF OF THE

ENGLISH COURT ADOPTION OF THE FICTION THEORY . IT WAS HELD THAT AS
THE COMPANY HA SFULFILLED REQUIREMENTS OF THE COMPANIES ACT.
THE COMPANY BECOME A PERSON AT LAW, INDEPENDENT AND DISTINCT
FROM ITS MEMEBERS.
 CRITICSM OF FICTION THEORY
• But one of the jurist Michound had raised various objections pertaining
to fictitious theory that if corporate sole or aggregate is fictitious or
imaginary person and only exists in the eyes of law, then how it is
possible for them to hold a tangible property?

• Another issue was raised that legislator has done a mistake on their
part by forming such entities or personalities, but legislator never make
things by itself.
CONCESSION THEORY
• EXPOUNDED BY VON SAVIGNY . DICEY AND SALMOND ARE FOUND TO SUPPORT
THIS THEORY

• SAVIGNY HOLD THAT THE SOVEREIGN AND THE INDIVIDUAL ARE THE ONLY
REALITIES

• THE IDENTIFICATION OF LAW WITH STATE IS NECESSARY FOR THIS THEORY BUT
NOT FOR THE FICTION THEORY

• A LOGICAL CONSEQUENCE OF THIS THEORY WOULD BE THAT A COMPANY

INCORPORATED IN AMERICA WOULD NOT BE RECOGNISED AS A LEGAL PERSON
UNLESS IT IS SPECIFICALLY GRANTED CONCESSION IN INDIA .
• NO SUCH CORPORATION HAS ANY CLAIM TO RECOGNITION AS A “PERSON”IT IS
MATTER OF DISCRETION OF THE STATE

• THE STATE IS CONSIDERED TO BE IN THE SAME LEVEL AS THE HUMAN BEING

AND
• AS SUCH . IT CAN BESTOW ON OR WITHDRAW LEGAL PERSONALITY FORM
OTHER GROUPS AND ASSOCIATION WITH IN JURISDICTION AS AN ATTRIBUTE OF
ITS SOVEREIGNITY HENCE, A JURISTIC PERSON MERELY A CONCESSION OR
CREATION OF THE STATE.

• OFTEN REGARDED AS OFFSPRING OF FICTION THEORY.

• IT IS OBVIOUS THAT WHILE THE FICTION THEORY IS ULTIMATELY A
PHILOSOPHICAL THEORY THAT CORPORATION IS MERELY A NAME AND A THING
OF THE INTELLECT, THE CONCESSION THEORY IS INDIFFERENT AS REGARDS TO
THE QUESTION OF THE REALITY OF A CORPORATION IN THAT IT FOCUS ON THE
SOURCES OF WHICH THE LEGAL POWER IS DERIVED.

• THE THEORY HAS BEEN CRITICISED BECASE IT OVER EMPHASIZES THE STATE
DISCRETION IN THE MATTER OF RECOGNISING LEGAL PERSON BECAUSE IT MAY
LEAD TO STATE DICTATORSHIP.
CRITICSM OF CONCESSION
THEORY
GIVE EXCESSIVE POWER TO THE STATE.

DISCRETION OF THE STATE

PURPOSE THEORY
• ORIGINALLY PROPOUNDED BY GERMAN JURIST BRINZ AND DEVELOPED IN
ENGLAND BY BAKER.

• SIMILAR TO THE FICTION AND CONCESSION THEORIES , IT DECLARES THAT ONLY

HUMAN BEING CAN BE A PERSON AND HAVE RIGHTS.

• JURISTIC PERSON IS NO PERSON AT ALL BUT MERELY A “ SUBJECTLESS

PROPERRTY DESTINED FOR A PARTICULAR PURPOSE AND THAT THERE IS
OWNERSHIP FOR PARTICULAR PURPOSE AND THAT THERE IS OWNERSHIP BUT
NO OWNER.
• THE JURISTIC PERSON IS NOT CONSTRUCTED ROUND A GROUP OF PERSON BUT
BASED ON THE OBJECT AND PURPOSE.

• THE PROPERTY OF THE JURISTIC PERSON DOES NOT BELONG TO ANYBODY BUT IT
MAY BE DEDICATED AND LEGALLY BOUND BY CERTAIN OBJECTS.
 CRITICSM OF PURPOSE
THEORY

THIS THEORY HAS BEEN RECOGNIZED IN GERMANY BUT THE ENGLISH COURTS
DID NOT APPROVE THIS THEORY
 BRACKET THEORY
• ALSO KNOWN AS SYMBOLISM THEORY.

• SET UP BY IHERING AND LATER DEVELOPED PARTICULARLY MARQUES DE

VAREILLES SOMMIERES.

• THIS THEORY IS SIMILAR TO THE FICTION THEORY IN THAT IT RECOGNISES THAT

ONLY HUMAN BEINGS HAVE INTERESTS AND RIGHTS OF A LEGAL PERSON.

• A CORPORATION IS ONLY A LEGAL DEVICE OR FORMULA WHICH WILL ENABLE

VERY COMPLEX JURAL REALTIONS TO BE COMPREHENDED MORE SIMPLE OR
OTHERWISE THE MEMBERS OF THE CORPORATIONS AS THE BEARERS OF THE
RIGHTS AND BEING BOUND BY THE DUTIES ARE FOR CONVENIENCE REFRRED TO
THE CORPORATION ITSELF. A,B,C FORM A COMPANY, AS IT IS CONVENIENT TO
REFER ALWAYS TO ALL OF THEM, A BRACKET IS PLACED AROUND TO UNDERSTAND
THE REAL POSITION, WE MUST REMOVE THE BRACKET.
 CRITICSM OF BRACKET
THEORY
THE WEAKNESS OF THIS THEORY LIES IN THE FACT THAT IT IS UNABLE TO INDICATE
WHEN THE BRACKET MAY BE REMOVED AND THE MASK LIFTED FOR THE PURPOSE OF
TAKING NOTE OF MEMBESR CONSTITUTING THE CORPORATION.
 REALIST THEORY
• FOUNDED BY GERMAN JURIST, JOHANNES ALTHUSINS HAS BEEN MOST
PROMINENTIY
• ADVOCATED BY OTTO VON GIERKE

• HOLDS THAT GROUP OR INSTITUTION HAS AN EXISTENCE BEYOND THE AGGREGATE

• OF THE INDIVIDUAL OR PERSONS FORMING THE GROUP.

• SUBJECTS OF RIGHTS NEED NOT BELONG MERELY TO HUMAN BEINGS BUT TO EVERY
BEING WHICH POSSESSES A WILL AND LIFE OF ITS OWN.

• THIS THEORY SAYS A CORPORATION IS NOTHING MORE THAN AGGREGATE OF ITS

MEMBERS CONCEIVED AS UNITY AND THIS UNITY THE ORGANIZATION OF HUMAN
BEING – A REAL PERSON AND A LIVING ORGANISM CAPABLE OF ACTIONS.
• AS SUCH BEING A JURISTIC PERSON AND AS ALIVE AS THE HUMAN BEING, A
CORPORATION IS ALSO SUBJECTED TO RIGHTS.
• A CORPORATION EXIST AS AN OBJECTIVELY REAL ENTITY AND THE LAW
MERELY RECOGNISES AND GIVES EFFECT TO ITS EXISTENCE.

• THE REAL JURIST ALSO CONTENDED THAT THE LAW HAS NO POWER TO
CREATE AN ENTITY BUT MERELY HAVING THE RIGHT TO RECOGNIZE OR NOT
TO RECOGNIZE AN ENTITY.

• A CORPORATION FROM REALIST PERSPECTIVE IS A SOCIAL ORGANISM. WHILE

A HUMAN IS REGARDED AS A PHYSICAL ORGANISM.

• THERE MAY BE VERY REAL ANALOGIES TO HUMAN PERSONALITY IN THE LIFE

OF A NATION , A GROUP, OR A UNIVERSITY, BUT A ONE MAN COMPANY OR A
FOUNDADTION SEEM FAR REMOVED.
 CRITICSM OF REALIST
THEORY
• According to Salmond, the realist theory is inapplicable to corporate sole.

• The their fails to prove that the inner unity of the group exists otherwise the in
the minds of the members who compose it.

• Also it is difficult to prove that there is a psychological continuity of experiences

in the group mind similar to that of the individual.