Real or Artificial? Jurisprudential Theories on Corporate Personality
![handle is hein.journals/uschinalrw4 and id is 326 raw text is: May 2007, Volume 4, No.5 (Serial No.30) US-China Law Review 1SSN1548-6605,USA
Real or artificial?
Jurisprudential theories on corporate personality
Zuhairah AriffAbd Ghadas
(Ahmad Ibrahim Kulliyyah ofLaw, International Islamic University Malaysia, Jalan Gombak, 53100 Kuala Lumpur, Malaysia)
Abstract: Generally there are two types of persons which the law recognizes, namely the natural and the
artificial person. The former is confined merely to human beings whilst the latter is generally referring to any
being other than human which the law recognizes as having duties and rights. In jurisprudence, discussion on
nature of corporate personality has always become one of the major focuses. Scholars have constantly explored
the issue on the recognition of corporation as a legal person. Even though there are many theories which attempt
to explain the nature of corporate personality, none of them is said to be dominant. It is claimed that while each
theory contains elements of truth, none can by itself sufficiently interpret the phenomenon of a juristic person.
This paper highlights five principal theories, which are generally applied to explain corporate personality and
confer the justifications for recognition of corporation as a legal personality.
Key words: corporate personality; jurisprudential theories; legal person
The question is at bottom not one on which law and legal conceptions has the only or the final voice: it is one
which the law shares with other sciences, political science, ethics, psychology and metaphysics.
1. Introduction
The decision of House of Lords in Salomon v A Salomon & Co. Ltd had a lasting influence in corporation
law. It is often credited with the principle of separate legal entity of the corporation distinct from the members.
Though there is no doubt that the Salomon case had play a significant role in company law, the Lordship decision
in this case was hardly the origin of the separate legal entity principle. The legal entity of beings other than the
human has long been recognized prior to 1897, in which the Salomon case was decided. The jurisprudence
theories on juristic person had been established since the early Roman law to justify the existence of legal person
other than the human. The State, ecclesiastical bodies and education institutions had long been recognized as
having legal entity distinct from the members.
The acceptance of the corporate personality of a company basically means that another non-human entity is
recognized to assume a legal entity. Although this theory has been accepted as a well-established principle, it is
actually essentially a metaphorical use of language, clothing the formal group with a single separate legal entity
by analogy with a natural person. This can be seen from the many theories of jurisprudence on corporate
Zuhairah Ariff Abd Ghadas (1968- ), female, Ph.D., assistant professor, Department of Private Law, Ahmad Ibrahim Kulliyyah of
Law, International Islamic University Malaysia; research field: international business law.
1 Geldart. (1911). Legal personality. Law Quarterly Review, 27, 94.
2 [1897] AC 22, HL.
Farrar JH.(1991). Company Law(3rd ed). London: Butterworths, 72.
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May 2007, Volume 4, No.5 (Serial No.30)
US-China Law Review; ISSN1548-6605,USA](ViewImageLocal?handle=hein.journals/uschinalrw4&div=59&collection=&method=preview&ext=.png&size=3)
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Real or Artificial? Jurisprudential Theories on Corporate Personality
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