Explain the following terms (a) Artificial person

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formsoforganisations

#1

Explain the following terms
(a) Artificial person (b) Perpetual succession © Common seal


#2

(a) Artificial Person It means company does not have a physical body like a human being. It is an artificial person created by law. Its operations are performed by the elected representatives of members, known as directors.
(b) Perpetual Succession This means a company has continuous existence independent of its members. A company is created by law and only law can bring an end to its existence.
The death, insolvency or incapacity of any member do not affect the existence of company.
© Common Seal Being an artificial person the company cannot sign, therefore there is need for common seal with its name engraved on it. The activities of the company are carried through a group of people. Any one acting of behalf of the company can use common seal in place of signature of the company to bind the company. Any document which does not bear the common seal of the company is not binding on the company.