Perpetual succession unique feature of companies
By: Dr. Abdelgadir Warsama Ghalib
Company is a “legal person” with juristic entity, established by “natural persons to perform on their behalf specific objective with certain rights and duties. The proprietor(s) or owner(s) of the company “natural person” generally not personally responsible about such rights and duties, in other words they are distinct different persons with different legal entities and obligations. The company, is a juristic person with no flesh and blood and cannot be incapacitated by illness, mental or physical and even it may not have an allotted otted span span of life.
This makes companies very different from its natural owners. However, this is not to say that the death or incapacity of its owners may not cause the company embarrassment or cat astrophic events. As such may occur, if all directors die or are imprisoned or there are few members to hold valid meetings.
The death of a company comes from bankruptcy, dissolution or other legal act, whereas the death of a member leaves the company unchanged, as mem may come and go but the company can go on for unlimited tenure. The insanity of the Chairman or managing director, will not be calamimus to the company provided that he is removed promptly and replaced by another competent person.
The continuing existence of a irrespective of changes in membership is very help ful many instances and is required. When an in dividual sells his business to another, difficult questions may arise regarding performance of ing contracts by the propri the assign-nt of rights of a person al nature, and the validity agreements made with customers ignorant of the change of proprietorship. Similar problems may arise a change in the constitutution of a company or partnership. Where the incorporated and the sale is merely the shares, none of these difficulties arises.
Legally, the company remains the proprietar of the business, the company performs the existing racts and retains the benefits of them and con nefits of them a agreements. The difficulties attending vicarious performance assignments and mistaken identity simply do not arise as in the case of natural persons. Legally, perpetual succession of companies is of prime legal img importance to the corporate structure and related business, Natural persona may die at any time, however, their death is not necessarily the death of their companies. Companies continue and this could be very beneficial for other related entities & the business in general.