Practice question · Multiple choice
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?
Hints
- Ask who owns the leased premises and who is liable on the contract.
- Could the shareholders sue the supplier directly in their own names?
Show the 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.
Practise Legal Personality and Capacity to Act
The app has 5 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on Legal Personality and Capacity to Act
- Three founders sign a supplier contract "on behalf of TechNova S.L." two weeks _before_ the company is…
- Which acts can a legal person validly perform in its own name?
- Legal personality begins at live birth but full capacity to act arrives at eighteen. Why does the law…
- A minor cannot hold property in their own name until reaching the age of majority.
- Complete the distinction.
- Order the steps by which a company becomes a legal person.
- Sort each entity: natural person, legal person, or neither.
- Match each concept to its definition.