Chapter 2 - Legal personality

Question 1

What is a legal personality?

Answer 1

Also known as “juristic personality.” - To be acknowledged as a person or bearer of its own rights, with liability for its own debts.

Question 2

What does Incorporation mean?

Answer 2

Formation of a company through registration with the Companies and Intellectual Property Commission (CIPC).

Question 3

What does Lifting the corporate veil mean?

Answer 3

A process used to ignore a company’s separate legal personality in order to hold persons inside the company personally liable.

Question 4

Name 3 ways in which legal personality can be acquired

Answer 4

1. By registration in terms of the Companies Act.
2. Through registration in terms of other pieces of legislation.
3. By conduct (common law method).

Question 5

Do branches and divisions of a corporation possess legal personality?

Answer 5

If branches and divisions are not registered entities themselves, but merely operate separately, for practical purposes, they do not, for purposes of law, have their own separate legal personality.

Question 6

Are trusts and partnerships juristic persons?

Answer 6

Trusts and partnerships do not have any of the benefits attached to legal personality.