Legal Standing, Juristic Personality & Agency

Introductory Topics: Legal Standing and Juristic Personality

• Legal status involves holding rights and duties, with the capacity to perform juristic acts, such as signing documents.
• Juristic personality refers to a non-living entity's capacity to acquire rights and duties via enabling legislation.
• A juristic person's life begins upon company registration and ends with deregistration; natural persons act on its behalf.
• Juristic entities can enter contracts, own property, sue, and be sued, and possess perpetual succession.
• Natural persons acquire rights from birth until death, beginning at separation from the mother's body after birth.

Principles of Agency concerning Juristic Persons

• Juristic persons, lacking physical presence, depend on human agents for actions.
• Agency determines whether a principal (e.g., juristic person) is liable for agent-entered contracts with a third party.

Fiduciary Law

• When an agent acts for another, the latter is vulnerable to abuse, especially relevant to juristic persons.
• Law must protect the vulnerable party, holding fiduciaries to higher standards through fiduciary duties.
• Fiduciary duties mandates that someone act to financially benefit another, identifying the duty holder as fiduciary and the receiver as principal or beneficiary.
• Fiduciary examples include partners in unincorporated partnerships, trust trustees, company directors, and close corporation members.

Juristic Persons Definition

• These are collections of individuals united as one body with perpetual succession under an artificial form.
• By legal policy, they act as individuals, taking and granting property, contracting obligations, suing and being sued, and exercising political rights.
• Entities can be juristic persons without statutory registration or specific statute creation; it is determined on a case by case basis.
• Businesses must register to be officially recognised

Common and Statutory Recognition

• Entities can be juristic persons at common law even without registration under statute.
• Businesses are required to register
• Juristic persons are created by legislation/statute through specific legislation.
• Eskom, for example, was founded by the Electricity Act 42 of 1922. Registration happens through enabling statutes:
• Close corporations act of 1984 does no new registrations
• Companies act 71 of 2008 completes registration

Companies as Juristic Persons

• Companies are recognized as separate legal entities under the Companies Act (s 19).
• Upon registration, the company exists continuously until removed from the companies register.
• Companies possess individual legal powers and capacity to the extent applicable otherwise provided by the Memorandum of Incorporation.

Key Features

• Members have limited liability to the extent of share ownership.
• Assets are the company's exclusive property
• Companies must seek redress for wrongs committed against them, based on the 'proper plaintiff rule' (Foss v Harbottle).
• Companies can contract with their members.
• They can acquire rights and duties separately from members.
• Owners/shareholders have no automatic right to manage.
• Profits belong to the company.

Principles of Agency: Commercial Agency

• Agency is a contract authorizing someone (agent) to contract or negotiate for another's (principal) benefit with a third party.
• Agency contracts create obligations between the principal and agent; then, the agent makes a additional contract with a third party.
• Contracts exist between principals and agents (usually mandate), and agents can be empowered or disempowered.

Implied Terms: Contract of Agency

• The agent has to be able to perform the mandate
• Agents must be honest and show good faith
  • No secret profits
  • No conflicts of interest
  • No delegation of authority
  • No disclosure of information
• The agent must exercise due care and act in accordance with the principals (P's) actions
• Duty to allow inspection of books and to render an account to the principal
• The principal is required to pay the agent agreed remuneration if the mandate is performed, as well as re-imburse the agent of expenses and losses
• Indemnify the agent for all losses he or she has suffered as a result of the execution of the mandate

Agency Relationship: Agent Requirements

• The principal must exist have the contractual capacity to enter a 3rd party contract
• The agent must have limited contractual capacity
• Authority must be provided and the agent must make it clear that they act for the principal
• Agents may incur liability when they fail to disclose the existence of a principal.

Commercial Advantages of Empowered Agents

• Agents do not need to enter each contract personally
• May authorize a representative
• Necessary for commercial entities
• Some issues include the possibility to conclude the contract and what happens if an agent acts without such authority
• What are the legal consequences if the agent does not disclose that he is acting as an agent
• The same principles apply when a director acts on behalf of a company

Authority in Agency

• It is essential in the context of agency
• The parties to the contract will be the principal and the third party and the agent is not held liable when the agent acted with authority
• If the agent does not have authority, they can not bind the principal and is then himself responsible
• Five was for an agent to acquire authority
  • Express Authority
  • Implied Authority
  • Ratification
  • Ostensible authority/apparent authority
  • Authorisation by Operation of Law

mandate?

• There are consequences of acting without authority or beyond the mandate
• The agent could be liable based on warranty of authority
• If the principles liable based on estoppel the may in turn be liable to the principle

The agents authority termination

• The authority of the agent will be terminated on the following
  • Mutual consent of the principal and agent
  • Revocation by the principal
  • Renunciation by the agent
  • Due performance of respective obligations
  • Expiry of period for which the authority was granted
  • Death of either the principal or agent
  • Insanity of the principal
  • Insolvency of the principal

-Application to business entities?

• Partners are agents of one another
• The trustee acts as an agent on behalf of the trust

Fiduciary Law: What is a fiduciary?

• It can be a person or business that has the power and obligation to act for another, requiring total trust, faith, and honesty
• Fiduciaries hold a legal or ethical relationship of trust
• They prudently take care of money or other assets for another person
• Examples include
  • Partner in a partnership
  • Trustee of a trust
  • Director of a company
  • Member of a close corporation

Nature of a Fiduciary's Responsibility

• Responsibilities are both ethical and legal
• The highest standard of conduct and trust
• Accept a fiduciary duty on behalf of another party
• Must avoid conflicts of interest, and must be in the best interest of others

Establishing a Fiduciary Relationship

• Fiduciary duties arise when there is a fiduciary relationship
• A connection with exercises in powers some sort of descrition
• The discrimination can be used solely to affect the beneficiary's legal or practical interest
• A risk with this comes a peculiar vulnerability

-Fiduciary duties

• It's nature and extent are question fact to be used from thorough investigation
• The duties to act in good faith, fair, and always avoid conflicts of interest.
• They always have to be honest during dealings and show over any the profit
• There must disclose any relevant important information and must keep the beneficiary informed
• Must account for the transactions that come at the end of a mandate

The Nature of a Delict

• There is a civil wrong (delict) vs. criminal wrong (crime)
• Compensation is a civil liability vs punishment
• Civil action is the Plaintiff vs the accused
• A delict create an obligation to compensation another
• Obligation based on the law of Roman obligations
• A delict refers to blameworthy and wrongful
• Element of delict are blamefulness wrongfulness causation, and loss

Definition

• It must blameworthy and wrong to caused arm to another person

Part 3: pre-incorporation matters

The Promoter: Definition

• These are the people that undertake to form a company, refer to project to see it goes; they have to take the necessary steps of act 2008 definition for chapter four only
• Promoting does not include engaging in experts
• Is not considered agent or trustee there is nothing that gives principal for a mandate
• there muse the during logical decision to promote company that some act or intent is performed

roles

• They do not have rights and duties
• To promote company, there must include
  • Attending to incorporation
  • Regulated documents isaka prospectus
  • Raising raising
  • business deals

Duties and Entitlements of the Promoter

• Fiduciary relationship duty to promote to incorporation act in faith
• Incomplete or Unratified contracts
• Is a company reliable for promotion services
• Companies can not contract so legal issues
• Can promotors be remunerated

-Pre-incorporation contracts

• Contact between the third party and the company BEFORE it occurs
• By person acting with the company acting yet company act 2008 in terms of agency

-Options/ contracts as a promotor

• Cession transfer all keeps on what to sell and nominate
• Stipuaito alter all has new requirements that pic mush have

Section 21

• Pre-incorporation contract must comply to these
• Enforce what he wants and be liable to claim it comes out company actions, which is why he makes
• There is must liability to promise
• Jointly severally liable

-Part 4 regulative framework

• That needs to be seen in making corporate forms and capital for two primary purposes
• The corporate form has been put at their disposal and they all concerned with the governing company

-Defining Corporate Governance

• By then companies are directed and handled and in terms of corporations all relevant of profit
• Narrow standings is to be shifting from long-term risks has to all accountability aspects

Good Corporate Governance

• As it means of growing and what access to long-term and what all parties are treated fairly
• It's found from the leaderships side and ethical and what stakeholder and all the nations around ickin

-Approach

• Should benefit all with pluralist
• Or value should be act and comment and all common

Sources of law

• There needs to be all mandatory and governance and should need with other protection as information

-Company act are the underlying

• Philosophies an act will say all paper act to write and a minimum fee in relation

There has needs to be similar truths and to find with minimum balance structure

• Act purpose to show and all in terms with offer with the and all agencies