The Companies Act, 1956 – Corporate Personality and its kinds

 When discussing "Corporate Personality" in the context of Indian company law, it's essential to

understand the fundamental principle that a company, upon incorporation, becomes a separate

legal entity. This concept was firmly established and elaborated upon in the Companies Act,

1956, and continues to be a cornerstone of company law, even with the subsequent enactment

of the Companies Act, 2013.

Here's a breakdown:

● Corporate Personality:

○ This legal concept signifies that a company is recognized as a "person" in the eyes

of the law, distinct from its members (shareholders).

○ This separation allows the company to:

■ Own property.

■ Enter into contracts.

■ Sue and be sued in its own name.

■ Have perpetual succession (its existence continues even if its members

change).

○ The core idea is that the company has a legal identity independent of those who

own or manage it.

● Key Aspects:

○ Separate Legal Entity:

■ This is the essence of corporate personality. The landmark case of Salomon

v. Salomon & Co. Ltd. established this principle firmly.

■ This separation shields shareholders from personal liability for the company's

debts.

○ Perpetual Succession:

■ A company's existence is not affected by the death, resignation, or insolvency

of its members.

○ Capacity to Sue and be Sued:

■ A company can initiate legal proceedings and can also be the subject of legal

action.

● Relevance to the Companies Act, 1956:

○ The Companies Act, 1956, provided the legal framework that solidified the concept

of corporate personality in India.

○ While the Companies act of 2013 is the current law, the principles established in the

1956 act are still very important for understanding modern company law.

○ The 2013 act has further refined and modernized the regulations, but the core

principle of a company being a seperate legal entity remains.

It's important to note that while the Companies Act, 1956, has been superseded by the

Companies Act, 2013, the fundamental principle of corporate personality remains unchanged.