Essentials features of a corporation

Reference may be made to the essential features of a corporation. A corporation has in law a different existence and personality from that of its members or shareholders. Its personality is fictitious . The incorporation of a firm bring about a fundamental change in its legal position. It comes to be invested with a personality with its own. The distinction between a corporation and its members is fundamental. 

The property of a corporation is not considered to be the property of the shareholders. No shareholder can claim that a particular part of the property of a corporation belongs to him. Likewise, corporation can not lay any claim to the properties of a shareholder. The shareholders of a corporation may be perfectly solvent but the corporation may become insolvent. 

As a corporation has a separate personality and existence of its own, there is no difficulty in a member entering into a contract with the corporation. A corporation can survive the last of its members. It does not die with the death of its shareholders. The law of a country lays down the conditions according to which a corporation can be brought into existence and also ended. 

The successor of a shareholder does not become a shareholder. He has to get himself registered as such. If he does not do so , he does not automatically become a shareholder. It is possible that one shareholder may purchase all the shares of the rest of the shareholders. In this way he can become as the sole shareholder. In case he dies and his successor or successors do not register themselves as shareholders , the company continues to exist even without a shareholder.

Corporation and natural personal

There is also a fundamental distinction between a corporation and natural person. A natural person is born as a result of the working of law of nature and also dies in the same way. However, when a corporation has to be created , an application has to be made to some office set up for that purpose by law. In the case of joint stock company , the application is made to the Joint Stock Companies. 

A corporation can also be created by means of a Royal Charter of an Act of parliament. This was done n the case of the English East India Company. In the same way the municipal corporations can be set up. A corporation also comes into existence by prescription. The same is the case with regard to the dissolution of corporation. 

A corporation can be declared defunct when it stops doing its business. Its charter can be forfeited. It can voluntarily surrender its charter or the privileges granted to it. A natural person can act himself . It is not binding on a natural person to get his work done through others. 

However, in the case of a corporation , it is absolutely essential that it must act through its agents. Moreover a natural person can do whatever he pleases .There is no restriction on what he can do and what he can not do. However in the case of a corporation, its powers are defined in the instrument when the corporation is created. 

A limited company can not go beyond the terms of its memorandum of association. Even if all the shareholders of a company agree , they can not do a thing which is beyond the terms of the memorandum of association. However the memorandum of association itself can be changed.

Agreement

According to Sir John Salmond, an agreement is also a source of law . He said “ That an agreement operates a source of rights is a fact too familiar to require illustration.” If X and Y enter into an agreement which is a lawful one , the courts of law recognize that agreement and enforce the same on X and Y . The same is the case if A and B enter into a agreement with a lawful purpose . However, such agreement bind only the parries to the parties not to the others. 

Law is a rule of conduct and generality is the test of law. There is no generality in an agreement between two parties. An agreement is recognized so long as t exists, and when it is dissolved , it has no farther effect. Agreement plays an important part in international law . There may be an agreement among number of State to follow particular procedure with regard to a certain matter . 

The States entering into the agreement are bound by that . If the agreement is continued for a long time by a large number of States , it acquires the force of a custom and thus custom is born as a source of International law. That's why Keeton Says , custom in a source of international law , but agreement never it so; agreement is merely is a source custom and then if a number of other agreement exist compelling uniformity of conduct of the States who are parties to them. 

The process of municipal law is the same. A number of agreements concluded in the same way and enforcing similar courses of conduct on the parties to them may cause a custom to grow. But it is the custom and not the agreement which is always the source of law.

Status of unborn person

Though the death person posses no legal personality, the case is otherwise in case of unborn child. There is nothing in law to forbid a man from owing property before he s born. His ownership is contingent as he may never be born yet but it is a real and present ownership. 

A man may settle property upon his wife and his unborn children to be born of her. Even if he dies intestate, his unborn child will inherit his estate. However many restrictions have been imposed in this connection . No testator can direct his fortune be accumulated for a hundred years and then distribute among his descendants. A child in the womb of his mother is for many purposes regarded by the legal fiction as already born. In the words of Coke, “The law in many cases hath consideration of him in respect of the apparent expectation of his birth.” To what extent an unborn person can possess personal and proprietary rights is a somewhat unsettled question . 

It has been decided that a posthumous child is ennobled to compensation under Lord Campbell;s Act for the death of his father. Willful or negligent injury inflicted in the child in the womb , by reason of it dies after having been born alive , amounts to murder or manslaughter. A pregnant woman condemned to death is respited as of rights until she has been delivered of her child. 

The rights of a unborn children , whether proprietary or personal , are all depends on his birth as a living human being. The legal personality assigned to him by way of anticipation falls away ab initio if he never takes his place among the living . Abortion and child killing are crimes but such acts do not amount to murder or manslaughter unless the child is born alive before he dies. 

A posthumous child may inherit , but if he dies in the womb or is still born , his inheritance does not take effect and no one can claim though him The case will be differently if he lived for a hour after his birth . If some of the beneficiaries of trust are unborn persons , the trust can not be varied without obtaining the consent of the court on their behalf .

Possession in fact and in law

Possession is divided into two categories , viz. Possession in fact and possession in law. Possession in fact is actual or physical possession. It is a physical relation to a thing. Possession in law means possession in the eye of law. It means a possession which is recognized and protected by law. There is sometimes a discrepancy between possession in fact and possession in law, although usually possession has existence both in fact and in law in the same person. A person who is in de fecto possession of a thing also falls to have de jure possession. 

However sometimes possession may have existence in fact and not in law. If a servant holds certain things in his custody on behalf of the master , he has the actual possession of those things but in the eye of law, the possession is with the master. In certain cases , possession may exists in law and not in fact. This is so in the case of constructive possession. 

A tenant may be occupying a particular building but the land lord has the constructive possession of the same. The same is the case with the things in the possession of servants , agents and bailees. The fundamental element both in possession in fact and in law is the same . The element is the possibility of excluding every person other than the possessor. From the use or control of the thing. According to Keeton “ possession in fact and possession in law are not invariably coterminus , although very frequently they are.” The Roman lawyers made a distinction between possession in fact as possessio naturalis ans possession in law as possessio civilis. 

In consequence of this divergence , partly intentional and avowed and partly accidental and unavowed between the law and fact of possession, it is impossible that any abstruct theory should completely harmonise with the detailed rules to be found in any concrete body of law. Such harmony would be possible only in a legal system which has developed with absolute logical rigour , undisturbed by historical accidents and unaffected by any of those special considerations which in all parts in the law prevent the in flexible and consistent recognition of general principle.

Methods of Transfer of possession

Transfer or acquisition of possession can be done in three ways viz, by taking by delivery and by the operation of law.

1. As regards the acquisition or transfer of possession by taking , it is done without the consent of the previous possessor . This also may be done in two ways . One is called for the rightful taking of possession and the other the wrongful taking of possession. A shopkeeper is entitled to get some money from a customer and the shopkeeper takes possession of thee things of the customer. This is an example of the rightful taking of possession. If a thief steal something from an individual his acquisition of possession is wrongful. However a person captures a wild animal which does not belong to anybody , the possession is called original.
   
   
2. Another wy of acquisition of possession is by delivery or traditio. In such a case , thing is acquired with the consent and cooperation of the previous possessor. Delivery is of two kinds , actual and constructive. In the case of actual delivery immediate possession is given to the transferee . There are two categories of actual delivery . According to one category the holder retains mediate possession and according to the other the holder does not retain mediate possession. If I lend a book to somebody I retain the mediate possession of the book but if I sell the same , I do not retain the mediate possession. Constructive delivery is that which is not direct or actual . There are certain things which can not actually be transferred by the owner to the purchaser or by the transferor to the transferee. In such cases, constructive delivery alone is possible. There are three kinds of constructive delivery . And those are traditio brevi manu, constitutum possessorium and attornment. In the case of traditio brevi manu possession is surrendered to one who has already immediate possession. In such a case , it is only the animus that is transferred as the corpus of possession is already with the transferee. I have already lend a book to somebody , if I sell the same book to him, it is a case of traditio brevi manu. In the case of constitutum possessorium it is only the mediate possession that is transferred and the immediate possession is retained by the transferor. I may sell my car to somebody but I may retain the physical possession of the same for some time in spite of the payment of price to me. In such a case the animus is lost and I keep the car on behalf of the purchaser. It is to be observed that on all cases of constructive delivery , there is a change of animus alone and corpus of possession remains where it was alone.
   
   
3. Transfer of possession can be made by the operation of law as well. This happens when , as a result of law , possession changes hands. If a person dies , the possession of his property is transferred to his successors and legal representatives .

Legal wrong

Salmond says that a wrong is simply a wrong act- an act opposit to the rule of right and justice .A synonym of it is injury , in its true and primary sense of injuria ( what which is contrary to jus ) though by a modern perversion of meaning this term has gained the secondary sense of harm or damage whether rightful or wrongful and whether inflicted by human agency or not. On the other hand Pollock says that wrong is in moral the contrary of right. Right action is that which moral rules prescribe or commend , wrong action is that which they prohibit . For legal purposes anything is wrong which is prohibited by law. There is wrong done whenever a legal duty is breached . A wrong may be reported in the largest sense , as anything done or omitted contrary to legal duty, regarded in so far as it gives rise to liability. Hence the being of duty, as it involves right , demands also the possibility , though we know too well that all rules are in fact sometimes breached . Duty right and wrong are not separate or divisible heads of legal rules or of their subject matter , but different legal aspect of the same rules and events. There may be duties and rights without any wrong , this happens whenever legal duties are justly or truly fulfilled. There can not of course be a wrong without a duty already being , but wrong also create new duties and liabilities. Strictly speaking therefore , there can be no such thing as a distinct law of wrongs. By the law of wrongs wee can mean only the law of duties , or some class of duties , regarded as exposed to infraction , and the special rules for awarding redress or punishment which come into play when infraction taken place . There is not on law of rights or duties and another law of wrongs. Nevertheless there are some kinds of duties which are more conspicuous in the breach than in the observance. The natural end of a positive duty is performance . A thing has to be done , and when it is duly done the duty is , as we say , discharged ; the man who was lawfully free. We contemplate performance , not breach. Appointments to officers are made or ought to be , in the expectations that the persons appointed will adequately fulfill their official duties . Wrongs are of two kinds , legal and moral . The essence of a legal wrong is that it is a violation of justice according to the law not the manner in which the guilty are treated. It is a legal wrong if a debt is not paid within the period of limitation. A moral wrong is an act is an act which is morally or naturally wrong . It is contrary to the rule of justice. It is a moral rule to disobey one's parents . A legal wrong need not be a moral wrong and vice versa.