Define: Artificial Person

Artificial Person
Artificial Person
Quick Summary of Artificial Person

An artificial person, in legal terms, refers to a legal entity created by law that has certain legal rights, duties, and responsibilities similar to those of a natural person. Also known as a juridical person or legal person, examples of artificial persons include corporations, partnerships, and government entities. Artificial persons have the capacity to enter into contracts, own property, sue and be sued, and engage in other legal transactions just like natural persons. However, unlike natural persons, artificial persons do not possess physical bodies or emotions, and their existence is purely legal and fictional. The concept of artificial persons is fundamental to various areas of law, including corporate law, where corporations are treated as distinct legal entities separate from their shareholders, directors, and employees.

What is the dictionary definition of Artificial Person?
Dictionary Definition of Artificial Person

An entity that is recognised by the law as a legal person.

An Artificial person is an entity that is recognised by the law as a Legal Person i.e. an entity holding legal rights and duties distinct from the individuals whom comprise it. For example: A registered company is a person in the sense that it can sue or be sued, as well hold property etc. in it’s own name. A company is not however, an individual or natural person.

Full Definition Of Artificial Person

An artificial person is sometimes also referred to in Law as a juridical person, fictitious person, legal person, juristic person or moral person.

An artificial person is an entity created by law and given similar legal rights and duties to that of a human being. It can be real or imaginary and for the purpose of legal reasoning is treated more or less as a human being. For example, a corporation, company etc.

Artificial Person FAQ'S

A corporation is seen as a artifical person. The word incorporate is derived from the Latin word corpus, which means “body.” It essentially means formed or added into a body and united by legal enactment.

When a new legal company is created, owners are able to act as one. The new body accepts responsibility for its acts while legally excluding individuals from personal liability. Stakeholders are a term used to describe owners. Not to be confused with a shareholder, who owns stock in a corporation and owns a portion of it. Stakeholders have more than just a vested interest in the stock’s performance.

Corporations have particular rights since they are considered and treated as artificial individuals. These rights include:

  • Under the law, you have the right to be protected.
  • Property rights as a form of ownership.
  • The Right to enter into business agreements and contracts.

Certain privileges, such as the right to marry, have a child, vote, or run for office, are not available to companies. Individuals, on the other hand, are free to exercise their constitutional rights.

Individuals and groups of people are held liable for their own conduct, as are corporations for the actions of their companies and the people they choose to employ. Governments and courts hold companies liable and responsible to function in compliance with statutes and government regulations if they are recognised as artificial persons under the law. These rules come from all levels of government, including the federal, state, and municipal governments, as well as all other relevant jurisdictions.

Corporations have an indefinite life, which means that the sale of shares or the death of a stockholder or employee has no bearing on the corporation’s continued existence.

A company can be sued because it is a separate legal body that operates under its own name. As previously stated, companies, like persons, are held culpable and responsible for obeying and operating within the law. If a company fails to comply or is sued and found guilty, the court may impose fines or even compel the company to dissolve.

Corporations are treated differently than individuals when it comes to tax rates and obligations. A corporation must decide whether it will profit from being taxed as a C corporation or a S corporation once it has been formed.

In other words, a C corporation is considered as if it were a separate taxpayer with its own set of taxes and expenses. If profits are earned, they are dispersed to the shareholders, who are responsible for paying personal income tax. This results in double taxation, which is why many businesses, particularly small ones, do not choose C corporation form.

If a firm qualifies to operate as a S corporation, taxes, profits, and losses are all passed through to shareholders and recorded only on the shareholders’ tax returns, avoiding double taxation.

For tax purposes, not every corporation can opt to be a S corporation. To be classified as a S corporation, they must meet specific requirements. When evaluating whether a firm qualifies for S status, factors such as the number and kind of shareholders, as well as stock classes, are taken into account.

An artificial person, also known as a legal person or juridical person, is a legal entity created by law that possesses legal rights, duties, and liabilities similar to those of a natural person.

In some jurisdictions, artificial persons can be held criminally liable for certain offenses, such as corporate crimes or violations of regulatory laws. However, criminal liability for artificial persons is generally limited compared to natural persons.

Yes, artificial persons can own property, including real estate, intellectual property, financial assets, and other types of assets, either individually or jointly with other parties.

In many legal systems, artificial persons, particularly corporations, have been granted some degree of protection under the right to free speech, allowing them to engage in commercial advertising, advocacy, and other forms of expression.

Disputes involving artificial persons are typically resolved through legal proceedings, including litigation, arbitration, or mediation, where the rights and obligations of the parties are determined based on applicable laws and contractual agreements.

Yes, artificial persons can be dissolved or terminated through legal processes such as voluntary dissolution, merger, bankruptcy, or court-ordered dissolution for reasons such as fraud, insolvency, or failure to comply with legal requirements.

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Disclaimer

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March, 2024.

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