# Legal Personality and Capacity to Act

Business I · Business Law · https://tryals.app/learn/business-i/legal-personality-and-capacity-to-act

## Who Counts as a Person in Law

Law recognizes two kinds of persons:

- **Natural persons**: human beings. Personality begins with **live birth** and ends with death.
- **Legal persons**: organizations the law treats as subjects in their own right, such as companies and foundations. A company can own property, sign contracts, and be sued in its own name separately from its members.

The entire lesson turns on the difference between two concepts:

- **Legal capacity**: the ability to **hold** rights and duties. Every person has it from birth.
- **Capacity to act**: the ability to **exercise** those rights personally. This is graduated, reaching full capacity at the **age of majority, 18**.

| | Legal capacity | Capacity to act |
| --- | --- | --- |
| What it is | Holding rights and duties | Exercising them personally |
| Who has it | Every person, from birth | Graduated, full at 18 |
| Can it be limited? | No | Yes (minority, judicial measures) |

## Capacities and Business Creation

A seven-year-old can **own** an apartment via legal capacity, but cannot **sell** it without capacity to act. Representatives must fill the gap.

> **Common pitfall:** Assuming a minor cannot own property. A newborn can inherit a house, but representatives must act for them in transactions.

**How legal persons are born**: companies acquire personality by **incorporation** through a public deed before a notary plus **registration in the Commercial Registry**. Before registration, individuals acting in the company's name answer personally for its debts.

**Why it matters for business**: personality creates a wall between company debts and owner wallets, decides who can validly sign, and marks the exact day a firm starts existing in the eyes of the law.

## Practice questions

9 of this lesson's 14 practice questions, with answers. The full set is in the app.

### 1. Three founders sign a supplier contract "on behalf of TechNova S.L." two weeks _before_ the company is registered. Registration never happens. Who owes the supplier?

A. TechNova S.L., which owes it retroactively
B. The three founders, personally
C. The Commercial Registry’s guarantee fund
D. No one, the contract is automatically void

**Answer:** B. The three founders, personally

**Why:** Without registration there is no legal person to be bound, so those who acted answer **personally and jointly**. The wall between personal and company debts is built on registration day, not on good intentions.

Page: https://tryals.app/practice/business-i/legal-personality-and-capacity-to-act/three-founders-sign-a-supplier-contract-on-behalf-of-technova-s-l

### 2. A company signs a lease, sues a supplier and is fined by a regulator, none of which a building or a filing cabinet can do. What has the law constructed?

A. A convenient shorthand for the collective acts of the shareholders
B. A legal person, with its own rights, obligations and assets
C. A contract among the founders that third parties may rely on
D. An exemption from liability for the individuals involved

**Answer:** B. A legal person, with its own rights, obligations and assets

**Why:** The company is a subject of law, not a label for its members, it owns, owes and is sued in its own name. That construction is what makes shares transferable without renegotiating every contract, and why a change of owner leaves the firm's obligations untouched.

Page: https://tryals.app/practice/business-i/legal-personality-and-capacity-to-act/a-company-signs-a-lease-sues-a-supplier-and-is-fined-by-a-regulator

### 3. Which acts can a legal person validly perform in its own name?

A. Get married
B. Own real estate
C. Sue and be sued in court
D. Sign contracts through its representatives

**Answer:** B. Own real estate; C. Sue and be sued in court; D. Sign contracts through its representatives

**Why:** A legal person mirrors a natural one in patrimony and contracts, but strictly personal acts — marriage, wills, family rights — remain human-only.

Page: https://tryals.app/practice/business-i/legal-personality-and-capacity-to-act/which-acts-can-a-legal-person-validly-perform-in-its-own-name

### 4. Legal personality begins at live birth but full capacity to act arrives at eighteen. Why does the law separate the two?

A. Because personality is a civil concept and capacity a commercial one
B. Because holding rights and exercising them are different things
C. Because a minor’s property is legally owned by the parents until majority
D. Because capacity to act is granted only to those who have acquired assets

**Answer:** B. Because holding rights and exercising them are different things

**Why:** The split lets rights attach immediately while protecting the holder from their own acts. Guardianship exists precisely in the gap between the two.

Page: https://tryals.app/practice/business-i/legal-personality-and-capacity-to-act/legal-personality-begins-at-live-birth-but-full-capacity-to-act

### 5. A minor cannot hold property in their own name until reaching the age of majority.

**Answer:** False

**Why:** Minors have full **legal capacity**: they can own, inherit, and receive gifts from birth. What they lack is capacity to *act*: managing or disposing requires their representatives.

Page: https://tryals.app/practice/business-i/legal-personality-and-capacity-to-act/a-minor-cannot-hold-property-in-their-own-name-until-reaching-the-age

### 6. Complete the distinction.

**Answer:** Legal capacity means **holding** rights; capacity to act means **exercising** them personally.

**Why:** Everyone holds; not everyone may exercise. That asymmetry is why guardians, representatives, and authorizations exist.

Page: https://tryals.app/practice/business-i/legal-personality-and-capacity-to-act/complete-the-distinction

### 7. Order the steps by which a company becomes a legal person.

**Answer:**

1. Founders agree on statutes and capital
2. They execute the public deed before a notary
3. The deed is filed with the Commercial Registry
4. Registration is granted and published
5. The company acts in its own name, debts its own

**Why:** Agreement → deed → filing → registration → personality. Until the fourth step, whoever signs is betting their own patrimony.

Page: https://tryals.app/practice/business-i/legal-personality-and-capacity-to-act/order-the-steps-by-which-a-company-becomes-a-legal-person

### 8. Sort each entity: natural person, legal person, or neither.

**Answer:**

- Natural person: A freelance graphic designer
- Legal person: An S.L. running three restaurants, A registered cultural foundation
- Neither: A brand name owned by a company

**Why:** Humans are natural persons; incorporated organizations are legal persons; brands and informal groups are objects or aggregates, things the law acts *on*, not subjects that act.

Page: https://tryals.app/practice/business-i/legal-personality-and-capacity-to-act/sort-each-entity-natural-person-legal-person-or-neither

### 9. Match each concept to its definition.

**Answer:**

- Legal capacity → Aptitude to hold rights and obligations
- Capacity to act → Aptitude to exercise rights personally
- Legal person → Organization recognized as a subject of law
- Representation → Acting validly in another’s name

**Why:** Holding, exercising, being, and standing-in, the four pillars of the law of persons.

Page: https://tryals.app/practice/business-i/legal-personality-and-capacity-to-act/match-each-concept-to-its-definition