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Legal Definitions
Term: separate legal personality
1.
The separate legal personality of a company means that is a different legal existence to the shareholders. A company may sue and be sued in its own name and holds property separately to its shareholders. As such the shareholders do not own the assets of the company, nor are they liable for its debts: they are the assets and liabilities of the company.
It is this separate legal personality that makes companies an attractive vehicle for commercial ventures, as the liability rests with the company, rather than the shareholders, directors, members or company officers.
The separate legal entity forms the basis for limited liability of shareholders. Shareholders' liability is limited to the moninal value of the shares allotted to them.
This separate legal personality has the consequence that a company has perpetual succession. Its legal existence survives its shareholders and directors. Its existence is ended when it is wound up pursuant to the Companies Acts.
Usage: The shareholder was not the proper defendant for the legal proceedings as the company was liable due to the principle that companies have a separate legal personality.
Related Words: limited liability; company; private company; public company; lifting the veil of incorporation; Companies Acts 1985 UK.
Personal Liability – Company Directors' Duties Expanded
Regulatory Compliance – Accounting Requirements under the UK Companies Acts
Companies: Internal Governance – Directors' Liabilities under the Companies Act UK
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