Juristic PersonJan 19, 2010
A Juristic Person is a legal entity recognized by law through which several natural persons are allowed to act as though they were a single composite individual. This entity is created entirely by legal fiction which the law recognizes and gives effect for certain purposes. To clarify, a Juristic Person is not strictly a person as we may know the term but rather it is a means for individuals of like persuasion to act in unison in certain matters. Examples of where resort to the creation of a Juristic Person is commonly encountered are in the fields of property law, contract law, finance and even in litigation – particularly asset and liability protection. Compared to natural persons, Juristic persons do not possess the same amount of rights and duties. Basic prerogatives or rights may be denied to Juristic persons since they are not human beings in the strictest sense. The biggest advantage of using juristic persons is that it creates a shield against liability and therefore protects property ownership. This trait is particularly manifest in asset protection. Since artificial beings such as Juristic persons are generally allowed by law to own property, they, and not their individual constituents, are the ones who are going to become liable for any act done. This protects the individuals from having to answer with their own property and therefore avoid liability. However, several doctrines have already taken notice of this effect and have therefore devised means to by-pass the protection afforded by Juristic persons. One classic doctrine is the “Piercing of the Corporate Veil” which allows the treatment of an artificial person as a mere group of individuals rather than a separate entity.