Corporations are legal entities that are separate from their owners or shareholders, and they have their own legal capacity to enter into contracts and conduct business. Here are some key aspects of corporations and capacity:
Legal person: A corporation is a separate legal person from its owners or shareholders. It can enter into contracts, own property, sue and be sued, and conduct business in its own name.
Limited liability: One of the main benefits of incorporating a business is that it limits the liability of the shareholders. The shareholders are generally not personally liable for the debts or obligations of the corporation, except in certain circumstances.
Capacity to contract: A corporation has the capacity to enter into contracts just like an individual. However, the corporation can only enter into contracts through its authorized agents, such as officers or employees, who have the authority to bind the corporation.
Ultra Vires acts: A corporation may have limits on its capacity to contract, which are set out in its articles of incorporation and bylaws. If a corporation enters into a contract that is outside of its authorized purpose, it may be considered an ultra vires act, which can be challenged by shareholders or other parties.
Corporate capacity in different jurisdictions: The capacity of a corporation to conduct business may vary depending on the jurisdiction where it is incorporated. Some jurisdictions may have stricter requirements for corporations to have capacity to enter into contracts or conduct business.
Overall, corporations have their own legal capacity to enter into contracts and conduct business, separate from their owners or shareholders. They can enter into contracts through authorized agents and have limits on their capacity to contract, which are set out in their articles of incorporation and bylaws. The capacity of a corporation may vary depending on the jurisdiction where it is incorporated.