Legal Personality Vs Legal Substance: What’s the Difference?

When someone says “I’m Legal,” what usually comes to mind is a person who is a practitioner in some area of the law. A lawyer is an attorney who practices law. Lawyers are there to provide counsel and representation to clients in court proceedings. There are many different levels of law practiced today including civil law, criminal law, family law, and so on.

Legal Definition of Legal: A system of guidelines, principles, and interpretive rules that govern the conduct of law. A judge, jury, attorneys, state Supreme Court, or the members of the legal entities make up a legal system. Just as in real life, you would not buy groceries from a car salesman, visit a doctor without consulting with a physician, or own a business without first establishing some form of legal entity. In the same way, you cannot buy property without having a legal entity such as a corporation or LLC. Each of the various types of legal entities have separate characteristics but derive their power from the same constitutional and inherent laws that created them.

Legal Definition of Personality: All individuals, corporations, estates, LLCs, unincorporated associations, public officials, trustees, government agencies, corporate trusts, LLCs, and private parties are considered personalities for the purpose of litigating litigation and interpreting the law. A legal personality would include the individual’s rights to life, liberty, property, freedom, and the ability to contract. It does not include powers derived from other sources such as proprietary rights, corporate trusts, government agencies, or personal assets.

The distinguishing characteristics of the legal personality are: the capacity to pursue ordered and regulated ends; the power of decision-making; and the sharing of responsibility for the outcomes of their actions. Individuals who are born into a legal personality are endowed with certain rights and privileges, just as natural persons. But the primary difference between a natural person and a legal personality is that natural persons can be coerced or compelled to act in ways that their character wouldn’t normally permit. For example, an employer shouldn’t coerce an employee to work extra hours or to work weekends or holidays without notice.

Legal Definition of Corporations: All corporations are legal persons under the law. The purpose of a corporation is to enable multiple persons to work together towards a common objective. Although corporations have various ways in which they may conduct business, the most common form is to form a corporation and then hold stock or securities in it. They may issue shares to their stockholders and/or hire officers and employees. Unlike individuals, corporations are restricted by the state in what they can do in terms of social enterprise or political action, and cannot spend their money in ways that their character would not otherwise support.

Natural Person Definition: All individuals are thought of by the law as having a legal personality, although this idea is somewhat dicey. In most cases, a human being exists in reality and all the same people have a particular set of duties and obligations towards one another. A company, for example, has a set of obligations to its stockholders, corporate executives, service contractors, and so forth. Although every natural person has these types of obligations to perform, it’s extremely difficult to draw a clear distinction between natural persons and legal personalities such as a corporation, LLC, or C corporation. However, this doesn’t mean that non-human legal entities don’t have obligations in the same way that humans do, just that the magnitude of those obligations tends to differ from those of a human individual to a greater degree.