NATURE OF CORPORATE PERSONALITY

LEGAL AID OYO JOURNAL OF LEGAL ISSUES VOL. 1, ISSUE 1, 2017.
103 By corporate personality its meant, the attribute conferred on a company upon incorporation that distinguishes it as an entity separate and distinct from its members. This distinction is succinctly captured by the Companies and Allied Matters Act (2004) hereinafter referred to as CAMA) when it states in Section 37 that
“As from the date of incorporation mentioned in the certificate of incorporation, the
subscriber of the memorandum together with such other persons as may, from time to time
become members of the company, shall be a body corporate by the name contained in the
memorandum, capable forthwith of exercising all the powers and functions of an
incorporated company including the power to hold hand, and having perpetual succession
and a common seal, but with such liability on the part of the members to contribute to the
assets of the company in the event of its being wound up as mentioned in this Act.”
438

In other words, when a company receives a certificate of incorporation it has a 'separate legal personality' distinct from its promoters, directors, members, and employees in law, the company becomes a legal person it its own right with the consequence that a corporate veil is cast, separating these parties from the company itself.
439
This separate legal personality of the company has been described as the most pervading of the fundamental principles of company law. It constitutes the bedrock principle upon which company is regarded as an entity distinct from the shareholders constituting it.
440
This doctrine though as is worthy to be noted is a legal fiction introduced for the convenience of the company in making contracts, in holding property, in suing and being sued, in management of its affairs and to preserve the limited liability of its shareholders. It was chiefly and still is for the purpose of clothing an association of natural persons with the characteristic of a distinct entity at law that corporations were invented and in use. As has been previously espoused above, traditionally, a corporation being a person in law is separate and distinct from its members. It was however not clear whether this principle also applied to Incorporated Joint Stock Companies until the House of Lords decision in the case of Salomon v Salomon & Co Ltd(1897) AC. 22 The case of Salomon v. Salomon is universally recognised as the authority which eloquently propounded the principle that a corporation is a separate legal entity. It created the idea that companies operate behind a metaphoric „veil of incorporation‟ which separates members from the company and permits the company to be completely independent, with rights and duties distinct from those possessed by its shareholders, directors and employees. The company is deemed an artificial legal person with independent existence. As Lord Macnaghten put it
“The company is at law a different person altogether from the subscribers…”
442

In that case, (i.e. Salomon v. Salomon) the facts were as follows Section 37, Companies and Allied Matters Act 2004 Singh Si Lifting of corporate veil with reference to leading
case,
http://artismc.com/index.php/blogs/view/55/221/
December 17, 2014 at 1:14 pm Ibid Barnes K. Di Cases And Materials On Nigerian Company Law, (Ile-Ife, Nigeria,O.A.U Press Ltd, p.
62.
442
Salomon V Salomon (Supra)

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