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A Company is called an artificial person because_________.
  • a)
    it does not have the shape of a natural person
  • b)
    it cannot be sued in the court of law
  • c)
    it is invisible and intangible
  • d)
    it exists in the eyes of law
Correct answer is option 'D'. Can you explain this answer?
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A Company is called an artificial person because_________.a)it does no...
A company is created by law. Though, it has no body and no conscience, it still exists as a person, having a distinct personality of its own. Because like a human being it can buy, sell and own property, sue others, be sued by others, hence called as an artificial person.
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A Company is called an artificial person because_________.a)it does no...
An artificial person is called a company because it exists in the eyes of the law.

Introduction

In legal terms, an artificial person refers to an entity that is recognized as having legal rights and obligations similar to those of a natural person. A company is considered an artificial person because it is a legal entity created by law and is distinct from its owners or shareholders.

Explanation

Existence in the eyes of the law: One of the key reasons why a company is called an artificial person is because it exists in the eyes of the law. It is a separate legal entity that is distinct from its owners or shareholders. This means that a company can enter into contracts, own property, sue or be sued, and engage in a wide range of legal activities just like a natural person.

Limited liability: Another important aspect of a company being an artificial person is the concept of limited liability. Shareholders of a company have limited liability, which means they are only liable to the extent of their investment in the company. This protects their personal assets from being seized in case of any legal issues faced by the company. The company, as a separate legal entity, is responsible for its own debts and obligations.

Perpetual existence: Unlike a natural person whose existence is finite, a company enjoys perpetual existence. It is not affected by the death or departure of its shareholders or directors. The company continues to exist and operate as long as it is in compliance with the legal requirements set by the governing law.

Separate legal personality: A company is considered to have a separate legal personality from its shareholders or owners. This means that the company can own property, enter into contracts, and be held liable for its own actions. The shareholders, directors, and employees of the company are not personally liable for the company's debts or legal obligations.

Conclusion

In conclusion, a company is called an artificial person because it exists in the eyes of the law as a separate legal entity. It has its own rights, obligations, and liabilities, and can engage in legal activities just like a natural person. The concept of limited liability and perpetual existence further reinforces the artificial person status of a company.
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A Company is called an artificial person because_________.a)it does not have the shape of a natural personb)it cannot be sued in the court of lawc)it is invisible and intangibled)it exists in the eyes of lawCorrect answer is option 'D'. Can you explain this answer?
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