Q: Elaborate Corporate Personality ?

Ans: Corporate personality is not a natural creation and is the creation of law of the country whereas the individuals who are  created by nature are also the legal persons. Company is also a legal person.

In accordance with the law, a corporation is an artificial person which was created by the personification of a group of individuals. The theory of corporate personality mainly states that a company has a legal identity which is different from its members. Both English law at the time of Britishers as well as Indian laws follow the concept of corporate personality.

So far as legal persons are concerned, there are two kinds of legal persons:

1. Natural persons (Individuals)

2. Artificial persons (Corporations)

The creditors are the persons who credit money to the company like shareholders as well as they are permitted to recover their money only from the company and the creditors can not sue or plead individual members. Similarly, the company is not liable to pay for the individual debts of its shareholders/members,  and the property or the business of the company can only be  used for the benefit of the company.

According to companies act, 2013, the company entertains certain rights as well as duties like the right to hold property, right to enter into contracts as well as to sue and be sued in the name of the company. The rights as well as liabilities of the members of company are different from the company.

In brief according to Companies act, 2013, the corporate/legal personality, which is the company will acquire and confer on the legal personality as well as independent status to the company.

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