Understanding Legal Personality

Legal personality is a concept that is essential to understanding the way businesses function. In a basic sense, it means that although a business is a non-human entity, it is still regarded by the law to have the legal status of a person. As such, businesses including cooperatives and corporations in addition to sovereign nations have the legal rights, responsibilities, liabilities, and protections of individuals. This idea of a “juristic person” allows for a group of people, such as those in a company, to be considered one individual, and for that juristic person to be a separate person, legally speaking, from all the individuals that comprise it.

Applying Legal Personality

Legal personality cannot be applied to all groups. While overall business may be considered a juristic person, committees and other subgroups within a larger organization or company usually do not receive the distinction of being a legal individual. Groups that are usually considered juristic persons include:

• Cooperatives
• Corporations
• Companies
• Limited liability corporations
• Churches
• Municipalities
• States and nations

As such, these groups are therefore allowed some of the following rights and responsibilities, including these abilities:

• Enter into contracts
• Sue and be sued
• Own and sell property
• Acquire debt
• Engage in free speech
• Be allowed due process
• Protect individuals within the group through their legal personhood

There are some differences for legal persons. They typically must pay different taxes than individuals, and they are not able to do some things that only individuals can do, such as marry or hold public office.

Contact Us

Understanding the implications of legal personality can help your business make better decisions. The Austin business attorneys at Slater, Kennon & Pugh Ltd.LLP can assist with these and other business needs. Call us today at 512-472-2431 to discuss your situation.