What is the legal effect of a corporation's separate legal personality?
Correct answer: B. The corporation owns property and bears liabilities in its own name
- A. The corporation and its members are treated as the same person
- B. The corporation owns property and bears liabilities in its own name
- C. The corporation cannot enter contracts without court approval
- D. The corporation's debts automatically become personal debts of directors
Explanation
Separate legal personality makes the corporation a legal person distinct from its shareholders and directors. It can own property, make contracts and incur liabilities independently, subject to applicable law.
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About Jurisprudence
Jurisprudence examines the nature, purpose and sources of law through the ideas of justice, rights, duties, sovereignty, liability and legal personality. It compares natural law, analytical positivism, historical, sociological and realist approaches, and considers how courts interpret legal rules, distinguish law from morality and resolve conflicts between competing principles.
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