Question

how is legal personality connected to your business or company?

how is legal personality connected to your business partner?

Answer 1

When a company is registered it is clothed in a legal personality and has almost the same rights and powers as a human being. Its existence is distinct and separate from that of its members. Members may change or die but the company continues to exist until it is wound up on grounds specified by the Companies Act - in other words, it has perpetual succession.

Upon registration, the company acquires locus standi, i.e. it becomes a “legal” person, having legal rights and obligations in the same way that a natural person does.

A person can run a business by himself as a Sole Trader. In all respects, the sole trader is running a business but the business is not a company. The Sole Trader may at the beginning adopt a trading name or register a trading name later.

The fact that the company is a separate entity means that it has its own responsibilities for debts etc., which cannot be summarily passed on to the shareholders. The concept of limited liability therefore serves to limit the obligations of shareholders; either by the unpaid or partly paid nominal value of shares held, or by guarantee

A company owns its own property – the shareholders have no direct right to this or any share of it.   A person who no longer wishes to be a member of the company is only entitled to whatever price he can get for his shares. A shareholder has no legal interest in the company’s property and cannot insure it against theft, damage, etc.

A "Business partnership" is defined as the relationship established by the gathering of more than one economically and legally independent real or legal persons within the context of an agreement, for the purpose of performing the contractual activates that has been committed to the project owner, mostly in the construction business, provided that each partner of the Business Partnership is separately liable to the project owner, for the fulfillment of the work in full

The conclusion of a written contract between the parties is important in order for the Business Partnership to be established to rely upon strong basis. A Business Partnership agreement may explicitly provide that each partner shall be jointly and severally liable for the performance of the commitments and businesses within the scope of the contract concluded with the project owner and of the obligations arising from that Contract but headed towards the partnership.

A Business Partnership is a special type of Joint Venture, which is solely depending on an agreement. In other words, a Joint Venture is a broader term which includes Business Partnerships.

Under the Joint Venture Solely Depending on the Agreement, the relationship is merely a law of obligations agreement concluded between the parties; fulfillment of the participation stipulations by the partners is sufficient for achieving mutual purpose and the establishment of a commercial company with legal personality is not required.