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Commentary on Section 16 of the Civil Code : Inalienability of legal personality and legal capacity

Publication at Faculty of Law |
2020

Abstract

The purpose of this paper is to comment on Section 16 of the Civil Code and explain why there is a difference between a natural and a juristic person in terms of the possibility of relinquishing legal personality and legal capacity. A legal personality belongs to both a natural and a juristic person.

Once relinquished, the given person becomes a mere object of legal relationships. However, this precisely is prohibited by Section 16 of the Civil Code, and a legal act whereby anyone would attempt to relinquish its legal personality would be disregarded.

However, the situation is different in respect of a legal capacity, which - in the true sense of the word - can only be borne by a natural person, not by a juristic person. Only a natural person is therefore prohibited to relinquish its legal capacity, insofar as it has one.

A legal act aimed directly at - or even resulting implicitly in - establishing a situation where a given natural person has become factually dependent on the power of another person (whether natural or juristic) - which, in consequence, would restrict the legal capacity of the natural person, is ostensible and will be disregarded (Section 554). Given that a juristic person lacks a legal capacity and always acts through its representative, it cannot relinquish this capacity.

A similar legal act whereby a juristic person delegates its capacity to perform legal acts therefore cannot be perceived as relinquishment by the juristic person of its legal capacity.