18TH SEPTEMBER UPDATE

We had a brief (or I do say a very brief) discussion on the theories as to the nature of

Artificial Legal Person. There are two main theories regarding this: A) Fiction Theory; and

B) Realist Theory. However, before going into the analysis of these theories, we briefly

talked about the reason as to the necessity of having the idea of “Artificial Legal Person” [I

discussed this in Section A and not in Section B. I would have discussed this in section B

also, but it looked as if everyone was about to fall asleep. So, I decided otherwise].

The following table can be used to understand the two theories and the conflict between

them:

THEORY MAIN FEATURES ASSOCIATED

SCHOLARS

SCHOLAR’S

ANALYSIS

FICTION Corporations are

mere fictions.

Since it is difficult

to determine the

collective will of

the

members/sharehol

Savigny, Salmond,

Kelson, amd

Holland

NOTE

Please do not consider this write-up as notes. This is a brief update about today’s class. You

can use it as a ready-reference to recollect what we discussed in class and as a base for

further study and preparation of notes. Please use other books and resources to substantiate

and add to the following discussion. Any claim that anything in the exams was not

mentioned in these updates shall not be entertained.

ders who form the

company, the

same cannot be

said to be

perceived in the

same as other

ALPs. Therefore,

it can be said that

a corporation is a

figment of

imagination.

REALIST The scholars belonging to

this school believe that

“corporation” is more

than a fiction,

They believe that the

purpose for which the

company is established

reflects the collective will

of its shareholders.

For example, the

memorandum of

association that the

company has to submit at

the time of registration

reflects the aim, objective

and the purpose of the

company and in this

regard same can be said

to be the reflection of the

collective will of the

Ihering and Gray.

company.