An artificial person, also referred to as a legal entity, is an entity that the law treats as if it were a person. This means it has legal rights and duties distinct from the individuals who constitute it. Examples of artificial persons include corporations, partnerships, trusts, and governments.
Historical Context
The concept of an artificial person dates back to Roman law where entities such as collegia and municipalities were considered to have a legal personality separate from their members. Over time, this concept evolved, especially during the Middle Ages with the rise of corporations, which further refined the idea of a separate legal entity.
Types and Categories of Artificial Persons
- Corporations:
- Private Corporations: Owned by private individuals or groups, and their shares are not publicly traded.
- Public Corporations: Their shares are traded on public stock exchanges.
- Government Entities: Includes municipal, state, and federal governments, which can sue and be sued.
- Non-Profit Organizations: Entities organized for charitable, educational, religious, or scientific purposes.
- Trusts: Legal entities where a trustee holds property for the benefit of beneficiaries.
Key Events in Legal Recognition
- 1215: The Magna Carta included the idea of corporate entities having certain rights.
- 1600s: The emergence of modern joint-stock companies, like the East India Company.
- 1819: The U.S. Supreme Court decision in Dartmouth College v. Woodward, which affirmed corporate personhood.
- 1866: The incorporation of modern legal definitions of artificial persons in civil codes.
Detailed Explanations
Legal Rights and Duties
An artificial person can:
- Own property
- Enter into contracts
- Sue and be sued
- Pay taxes
- Be held liable for breach of laws or contracts
Importance and Applicability
The recognition of artificial persons is crucial for the functioning of modern economies as it allows for:
- Continuity beyond the life spans of individual members.
- Liability protection for individual members.
- Structured and systematic management of resources and risks.
Examples
- Apple Inc.: A publicly traded corporation.
- The Gates Foundation: A non-profit organization.
- City of London Corporation: A government entity with historical significance.
Considerations
While artificial persons provide many benefits, such as limited liability and perpetual succession, they also face issues like double taxation (in the case of corporations) and regulatory scrutiny.
Related Terms
- Natural Person: A human being with rights and duties under the law.
- Corporate Personhood: The concept of treating corporations as persons in certain legal contexts.
Comparisons
- Artificial Person vs. Natural Person: An artificial person is created through legal processes and exists separate from its members, while a natural person is a human being with inherent legal rights.
Interesting Facts
- The concept of corporate personhood has sparked debates, especially in contexts like political campaign contributions in the U.S.
- In some jurisdictions, even animals and AI have been considered for legal personhood.
Inspirational Stories
- Milton Hershey: Founded the Hershey Company which continues to thrive long after his death, illustrating the perpetual nature of artificial persons.
Famous Quotes
- “Corporations have neither bodies to be punished, nor souls to be condemned.” - Edward Thurlow, 1st Baron Thurlow
Proverbs and Clichés
- “Corporations are people too.”
Expressions, Jargon, and Slang
- Corporate Shield: Protection of personal assets of members from the corporation’s liabilities.
- Piercing the Corporate Veil: Legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders.
FAQs
Can an artificial person hold property?
How are artificial persons taxed?
Can artificial persons be criminally liable?
References
- Black’s Law Dictionary
- U.S. Supreme Court case Dartmouth College v. Woodward (1819)
- “Legal Aspects of Business” by Akhileshwar Pathak
Summary
The recognition of artificial persons is a foundational concept in law and business, facilitating the structured management and operation of entities separate from their human members. This status enables corporations, governments, and other entities to perform many legal actions and responsibilities necessary for their functions in society. Understanding the role and legal implications of artificial persons is essential for professionals in law, business, and economics.
