Question

“Company is an artificial person with a separate legal entity, perpetual succession and common seal.” Comment.

Answer 1

Although a company is an artificial person, it has the same rights, obligations, and capabilities as a real person. It can borrow money, make contracts, sue and be sued by others, and hold property in its name, but it is unable to run, speak, eat, drink, or do other things. A company is established by law and may only be terminated by law. Although members may come and go, the business still exists. But as it is unable to sign any documents, it substitutes a common seal for signatures. Any contract or agreement that does not bear the company’s seal is not valid.