Question

Question 0ne (1) [15 Marks]
a) Briefly discuss five traits an individual wishing to start a business entity would consider.

b) Discuss the concept of a company having legal personality. Refer to legal authorities in
motivation of your answer.

Answer 1

A. There are few different traits to be considered-

>Self-confident? An entrepreneur needs to believe in his or her abilities.

>Thrive on ambiguity, juggling multiple roles with ease? Entrepreneurs rarely have set hours and nearly always function in multiple roles: decision maker, research and development geek, marketing and sales genius, financial wizard, and human resource guru.

>Comfortable with risk? There will be situations when the person has to take huge risk while making decisions relating to the business. He/she should be capable of doing so.

>Eager to explore new ideas, try new things? Being open to—and enthralled by—future possibilities and innovative approaches is a hallmark of the successful entrepreneur.

>Can you make the hard decisions? There will be hard decisions to be made, in every aspect of the business.

B. To have legal personality means to be capable of having legal rights and duties within a certain legal system, such as to enter into contracts, sue, and be sued. Legal personality is a prerequisite to legal capacity, the ability of any legal person to amend rights and obligations. Legal persons are of two kinds: natural persons – people – and judicial persons – groups of people, such as corporations, which are treated by law as if they were persons. While people acquire legal personhood when they are born, judicial persons do so when they are incorporated in accordance with law.

For example Mr. Adam may call his business “Modern Wood Carvings Company”. As far as the General Public is concerned they will be dealing with a business called Modern Wood Carvings. However the legal position is that there is no separate legal entity. It is Mr. Adam who is trading as Modern Wood Carvings Company.