CORPORATE PERSONALITY

Having discussed registration of company, it is also important to educate on the effect of registration of company, the advantages as this is unknown to many.

The first effect of registration is that the company becomes a legal person separate and distinct from its members, whom is capable of suing and being sued, this is called the Independent corporate existence. A company becomes a corporate body with perpetual succession and a common seal, it also becomes a separate legal person distinct from the members, who formed it and is capable of acquiring, holding and alienating property.

This independent corporate existence was emphasized in the famous case of SALOMON V. SALOMON

A company which has complied with the requirements relating to the incorporation
of companies contained in the Companies Acts is a legal entity separate and
distinct from the individual members of the company. It matters not that all the
shares in the company are held by one person, excepting one share each held by
the persons who, as required by the Acts, have subscribed their names to the
memorandum of association to enable the company legally to be formed, nor does
it matter that those persons are merely the nominees of the principal
shareholder. Once a company has been legally incorporated it must be treated
like any other independent person with rights and liabilities appropriate to
itself, and the motives of those who promote the company (eg, to enable them to
trade with the benefit of limited liability) are absolutely irrelevant in
discussing what those rights and liabilities are. A company is not the agent of
the shareholders to carry on their business neither for them, nor in it the trustee for
them of their property.

Also where the legal personality is called to question and issue is jointly thereon, the certificate of incorporation should be produced as it the only by that certificate that the legal personality can be proved in such circumstances.

To every general rule in law there is an exception,where there is evidence of direct fraud by members of the corporate entity the independent corporate entity may be set aside in some instances, thereby leading to the veil of incorporation being lifted In CHINWO V. OWHONDA the court observed that allegation of crime lifts the veil of corporate and opens up the body to judicial enquiry upon good and substantial fact placed before a court of competent jurisdiction.

Also veil may be lifted where a director of a company knows that company carried on business after the numbers of director has fallen below two or more than 60 days such director shall be liable for the period during which they carried on business.

Thank you.

Oyenike Alliyu-Adebiyi LLB(hons)BL