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ACCA Applied Skills · Corporate and Business Law (Global) · Corporations and legal personality

Ridge Ltd, a registered company, wishes to sue a debtor in its own name and to own land in its own name. Which feature of corporate personality allows this?

A company can sue, be sued and own property in its own name because it has separate legal personality from its members. The company itself, not its shareholders or directors, holds the land and brings the claim.

  1. AThe company can sue, be sued and hold property in its own name, separately from its membersCorrect
  2. BThe company's members are each entitled to sue on its behalf and hold the land jointly
  3. CThe company's directors hold all its property personally as trustees for the members

Explanation

Separate legal personality means the company itself has capacity to contract, own property and take or defend legal action in its own name. Members do not own the company's assets, and directors do not hold them personally, so the other options are wrong.

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