Natural and artificial persons

 Society is composed of individuals who persue, individually

or collectively, different aims and interests. As such,
individuals and entities are vested with rights and duties, as it
is the purpose of law to ensure that a persons who compose
society live and work togheter in an orlerly manner.
 As a consequence, not only individuals (natural persons)
enjoy the legal status of «person», but also organizations
(artificial persons)
 Natural and artificial persons

 In the language of Italian Private Law, natural

persons and artificial persons designate the subjects
of the law, because they are:
 Vested with rights and duties, insofar as their very
existence, from cradle to grave, is immersed in and
originates in relationhships and situations falling
under legal rules;
 Have the ability to enter into legal relationships,
insofar as their acts may generate effects within their
legal sphere.
 Juridical Capacity
 Juridical capacity is the capacity of being part of a legal
relationship, that is, to enjoy rights and to be burdened by
duties.
 Art. 1 of the Civil Code states that juridical capacity is
attributed to the human being from the moment of birth
and it lasts until the moment of the person’s death.
 As the Italian Constitution (Const.) affirms under Art. 2,
the “inviolability of the rights of the persons” means that
their legal capacity is a prerogative guaranteed by the
Constitution itself and, consequently, as stated under Art.
22 Const., “no person may be deprived, for political
motives, of his legal capacity”
 Art. 2 Const.

The Republic recognizes and guarantees the inviolable

rights of the person, both as an individual and in the social
groups where human personality is expressed. The Republic
expects that the fundamental duties of political, economic
and social solidarity be fulfilled.
 Juridical Capacity
 The law can set forth special juridical incapacities for single
legal relationships (people can enter most labour contracts
only when they are 15 years old and couples younger than
16 cannot marry).

 Whereas the legal capacity of natural persons is concurrent

with their birth, the legal capacity of legal persons is
consecutive to their establishment (or incorporation): in
other words, the legal capacity of a legal person is acquired
rather than innate.
 Personality rights

 From the moment of birth, human being becomes the

holder of fundamental rights, defined as personality
rights, such as the right to a name, to life, to health, to
privacy.
 These rights are enforceable erga omnes, which means
that their violation can be asserted against anyone as they
are "absolute" rights
 Capacity to Act
 The capacity to act (art. 2 c.c.) is the capacity to manage and dispose of
rights, through contracts and other juridical acts labeled “negozi giuridici”
under Italian Law (such as marriage, last wills, contracts, etc.).

 When one reaches the age of majority, he acquires the capacity to act, that
is, the capacity to exercise rights and duties in his own interest and in his
own name and to perform all acts. It is given to each individual reaching
the age of consent (in Italy, at 18) because it is assumed that a person of
this age is able to understand the legal ramifications of his/her actions.

 The general rule suffers few exceptions, referred to as incapacities to act

provided for by law.

 It does not mean, however, that “legal acts” performed by persons lacking
capacity to act are legally irrelevant.
 Capacity to act

 For example, a contract entered into by a person lacking capacity

to act is legally binding and effective until it is annulled by a court
(Art. 1425 CC).

 Moreover, a minor with sufficient ability to understand and to

intend may perform valid legal acts in the name and in the interest
of a person who has the capacity to act (Art. 1389 CC), i.e., acting
as the agent of the person having the capacity to act.
 Legal incapacities
 The legal system provides for a plurality of incapacities to act
General incapacities to act

 a) minority (Art. 414 CC);

 b) judicial interdiction: such incapacity to act refers to persons who are

routinely impaired in their mental ability and – hence – may be deprived of
their capacity to act, by means of a judicial decision (cf. Art. 414 CC);
 c) interdiction at law (cf. Art. 32 Criminal Code): such incapacity
represents an additional sanction, consisting of the deprivation of the
capacity to act, with reference to persons sentenced to an imprisonment
term exceeding five years.
 Legal incapacities
 While minority and judicial interdiction aim at protecting the person
deemed not to be in a position to assess the legal effects of the acts they
enter into, interdiction at law aims at inflicting an additional
punishment (in addition to imprisonment) to the convicted criminal.

 For that reason, differently from the latter, a minor and the person who
has been judicially “interdicted” may neither marry nor draw up a valid
will.
 Legal incapacities
 A further distinction refers to persons entitled to file a petition seeking
annulment of a contract: while, in the case of minors and persons who
have been judicially interdicted, solely their guardians (or the
incompetent as well, if their capacity is no longer in question) may
request the annulment of the act entered into, in the case of interdiction
at law, the other party to the contract is entitled to seek its annulment.
 Acts in the name and on behalf of the person lacking the capacity to
act may be entered into by a legal representative.
 In the case of minors, as a general rule, both parents share the parental
authority and are legal representative of the child; under special
circumstances (parents not available or unfit) a guardian (tutore) is
appointed by the court and is granted the authority to enter into acts in
the name and on behalf of the minor.
 A guardian is appointed by the court also in case of interdiction of an
adult.
 Deprivation
 The capacity to act can be totally paralyzed in the
interest of the person who becomes unable to manage
her assets with the deprivation procedure
(“interdizione”).
 This situation occurs when a person is severely
impaired on an habitual basis in her mental ability to
make decisions (art. 414 ff. c.c.).
 The person deprived of her capacity to act is
represented by a tutor appointed by the Court.
 Disability

 The capacity to act can be partially paralyzed with the

disability procedure (“inabilitazione”), when the
person:
a)suffers from a mental impairment not so severe as
the ones leading to deprivation;
b)abuses of alcohol or drugs;
c)is very prodigal and then creates a risk of serious
economic losses to herself or her family;
d)has been deaf of blind since her birth or a young age,
and has not been sufficiently trained to overcome the
impairment.
 Disability and Deprivation
 The tutor totally substitutes himself in the expression
of the will of the person (as happens in the case of the
minor of age).
 The curator only assists the disabled person for the
acts going beyond the ordinary administration (as
happens in the case of the emancipated minor).
 In these cases too, the acts of extraordinary
administration must be authorized by the Court.
 Support Administration (i)
 The Law no. 6/2004 introduced into the Civil Code
the support administration procedure
(“amministrazione di sostegno”).
 Persons who find themselves in a partial or temporary
impossibility to provide for their own interests may
be assisted by an “administrator supporting them”, to
be appointed by the competent court.(see art. 404 ff.
c.c.).
 Support Administration is much more flexible than
the deprivation and the disability procedures.
 Support Administration (ii)
 First, deprivation and disability are applied or
revoked through a judgment issued at the end of a
full and formal lawsuit, while support
administration is left to a simple decree of the
Court that can easily be enacted and modified.
 Second, the decree states for which specific acts the
participation of the administrator is necessary and is
therefore much more flexible (and adaptable).
 Third, the administrator is appointed for a limited
period of time after which there is a new assessment
of the situation.
 Support Administration (III)
 A support administration (amministrazione di sostegno) limits
a person’s capacity only with respect to those affairs
explicitly precluded in the court order that also appoints the
support administrator (amministratore di sostegno).
 The support administrator will either assist or act on behalf of
the person (beneficiario), as per the powers vested in him/her
by the court order.
 Natural Incapacity (I)
 What if a minor is mature enough to manage his
interests or a person deprived of her capacity to
act has a moment of clearness of mind?
 What if a person of age and not deprived of her
capacity is not capable of understanding the
consequences of her actions and to carry out them
voluntarily?
 Natural incapacity (II)
 In the last case there is only a natural incapacity
to act, which leads to the violability of:
a) contracts, whether they seriously damage the
author of the act and the counterpart is in bad
faith (art. 428 c.c.);
b)unilateral acts inter vivos having an economic
content whether they seriously damage the author
of the act (art. 428 c.c.);
c) juridical acts other than the ones under b) and c)
when expressly stated by the law (see art 120 for
marriage, art. 591 for last wills acts and art. 775
for gifts).
 Natural incapacity (III)

 A case-by-case determination is necessary in order to

determine whether the alleged inability to understand
and intend existed at the time the act was performed, all
the more so as such incapacity may be transient (i.e.,
intermittent and not continuous).
 Legal persons and collective
entities
 The expression “artificial person” is referred to by lawmakers to designate
a variety of entities for which the Civil Code and other statutory provisions
lay down the rules
 Legal scholars draw a distinction between legal persons and collective
entities. The are both groups of persons established for a specific purpose
and in pursuance of specific interests which under the law are considered
separate and distinct from the individuals that compose them. However,
only the former have what we call “legal personality”.
 The concept of “legal personality”
(I)
 THE o-called separate “legal personality” originates in the mercantile practices that
became common usage as trade between colonies developed. To facilitate such trade,
monarchs would grant trade partnerships the right to (and privilege of) limited liability.
In other words, the personal assets of the partners in the venture were protected from
unlimited liability so that, should the venture face mounting debt, the debt was to be
paid exclusively from the assets of the partnership.

 It is extremely important to understand that not every artificial person fully enjoys the
privilege of limited liability. While any artificial person may be vested with rights and
duties and exercise them, only some enjoy a perfect separation between the assets and
liabilities of the entity itself, on the one hand, and the assets and liabilities of its
members/shareholders, on the other. These are called legal persons
 The concept of “legal personality”
(II)
 For instance, a non-registered association – being a collective
entity – is not a legal person pleno iure since: according to Art. 38
CC, should the common assets of the non-registered association
not suffice to repay its debts, persons who have acted in the name
of and on behalf of the association are personally and jointly liable
with their own (personal) assets.

 A similar rule applies to partnership companies, with reference to

the personal and joint liability of the individual partners for the
company’s debts (as opposed to capital companies)
 The concept of “legal personality”
(III)
 On the other hand, registered associations, foundations (both regulated
by the provisions contained in the First Book of the Civil Code) and
capital companies (governed by the rules laid down in the Fifth Book
of the Civil Code) are legal persons: i.e., their assets and liabilities are
ascribed exclusively to the collective entity and are – hence – considered
separate and distinct from the assets and liabilities of their
members/shareholders.
 In other words, should the common assets of the legal persons not be
sufficient to cover their debts, it will be the respective creditors that will
suffer the loss, not the individual members/shareholders.
 LEGAL PERSONS
 Registered Associations (Associazioni riconosciute)

 Foundations (Fondazioni)

 Capital companies (Società di capitali)

 Stock companies (Società per Azioni)

 Limited stock partnerships (Società in Accomandita per Azioni)

 Limited liability company (Società a Responsabilità Limitata)

 COLLECTIVE ENTITIES
 Non registered associations (associazioni non riconosciute)
 Committees (comitati)
 Partnership companies (società di persone)
 Simple company (società semplice)
 Company in collective name (Società in nome collettivo)
 Simple limited company
 Final questions
 What is the difference between juridical capacity and
capacity to act?

 What is the difference between judicial interdiction and

Support Administration?

 What is the difference between legal persons and collective

entities?