THE LAW OF PERSONS- Business Law

THE LAW OF PERSONS

2.1 Introduction

A person is defined is defined as an entity or being which is recognized
by law as having certain defined rights and obligations. Such an entity
or being has said to be a legal person. Legal persons are divided into
two namely;

  • Artificial persons
  • Natural persons

An entity which` is recognized as a person is said to have a legal
personality. i.e. it has attributes which are recognized by law as
constituting a person. Examples include human beings (natural persons)
and corporations (artificial persons) .These have legal personality to
the extent that they each have their own rights and obligations
recognized by law

2.2 Artificial Persons


Artificial persons may be corporations or unincorporated associations.

2.2.1 Corporations

A corporation may be defined as an association of persons binded
together for sole particular object, usually carry on business with a
few of profit. If other words a corporation is an artificial person
created with by law with capital divided into transferable shares and
with limited or unlimited liability possessing a common seal and
perpetual succession. The corporation has, therefore, ` legal
personality of its own distinct from that of its members. The individual
members have rights and liabilities of their own apart from those of the
corporation. The corporate body is different in that it has perpetual
succession, it never dies and has a common seal by which to authenticate
its acts. The members may change, but the corporate body does not.

Types of Corporation
There are basically two types of corporation: corporation sole and
corporation aggregate. The two differ both in the manner of their
creation as well as their membership and also in their operation

  • Corporation sole
    corporation sole is one which consists of one human member at a
    time, such member being the holder of an office which is held in
    succession by one person at a time. Some corporations sole are
    creatures of the common law, e.g. the office of a bishop. There
    cannot be more than one bishop in a `diocese at the same time and
    when a particular bishop dies as an individual, his office never
    dies and continues in existence with another bishop as a successor.
    Other corporation sole are created by constitution or any Act of
    Parliament e.g. the Office of the President or the Office of the
    Pubic Trustee.
  • Corporation Aggregate
    Most corporations are corporations aggregate. These consist of two
    or more members at the same tire. Basically, there are two types of
    corporation aggregate operating in Kenya. These are statutory
    corporations and registered companies.

Creation of Corporations
A corporation can be created in the following to ways:

  • By act of parliament
    The corporations can be created by the Act of Parliament in Kenya. The state corporations are% created by this method. The main examples of such corporations are: Kenya railways, Kenya airways, Kenya Meat Commission, Pyrethrum Board of Kenya, Coffee Board of Kenya e.g. Such corporations owe their legal existence to a statue. A statue creating the corporation gives it a name, stipulates its composition, and prescribes its powers and duties. The powers of these corporations are limited to those which are expressly conferred by the acts. The powers of statutory corporation can be extended or limited by statutes. These can be also dissolved by statutes. The statutory corporations are legal persons. They can sue and be sued. They can buy and sell property.
  • By registration under companies act
    The registered companies are created by registration under the
    companies act. These are also know as limited company comes into
    existence by complying with the provision of the companies act (cap
    486) a limited company may either be private or public limited
    company. A private limited company can be registered by two or more
    persons but it is not allowed to call upon the public for funds in
    the form of shares or debentures. A public limited company can be
    registered by seven or more persons and it can offer its shares to
    the general public freely. In Kenya, the limited companies are
    formed according to the companies act (Chapter 486). This act is
    based on companies act 1948 of UK.

2.2.2 Unincorporated Associations
An incorporated association is one which has no corporate status is one
which has no corporate status i.e. it has no legal personality and
cannot , therefore, own property or enter or enter into contracts or sue
or be sued in its own name. Such associations include clubs, societies,
trade unions, partnerships e.t.c. These associations consist of groups
of individuals. The property owned by such associations is regarded as
the joint property of all members although this property is held on the
behalf of all members by trustees. Any contract entered into by a member
on behalf of the association is regarded as the contract of that member.
If a committee has
committed a tort then the committee members are responsible.

  1. Partnerships
    Partnerships are incorporated associations. In Kenya all partnership are
    formed in accordance with partnership act (Cap 29). Section 3(1) of this
    act defines partnership as the relationship which subsists between in
    common with a view of profit. In a partnership business, two or more
    persons jointly run a business. The liability of the individual partner
    is unlimited unless the partnership agreement provides for any
    limitation. A partnership consists of not more than twenty persons
    except in certain cases e.g. practicing solicitors, professions
    accountant and members of the stock exchange where this figure may be
    exceeded. Normally, the number of partners in a partnership business
    varies from two to five. In the case of banking business, the number of
    partners is limited to ten.
    The name of partnership must be registered first under the Registration
    of Business Names Act (Cap. 499). The formation of a partnership is not
    very complicated. The partners may sue and be sued in the name of their
    firm, but if they sue in the firm’s name they can be compelled to
    disclose the name and address of every members of the firm. If sued in
    the firm’s name they must enter an appearance in their own name
    individually but subsequently proceeding continues in the name of the firm.
  2. Trade Unions
    A trade union is the association of laborers. It has been defined by
    Prof. Web in the words, “A trade union is a continuous association of
    wage earners for the purpose of maintaining and improving the conditions
    of their employment. Trade unions are also unincorporated associations.
    All the trade unions in Kenya are established according to the
    provisions of Trade Unions Act (Cap 233). This Act defines a trade union
    as “an association or combination, whether temporary or permanent, of
    more than six persons, the principal objects of which are under its
    constitution the regulation of the relations between employees and
    employers, or between employees and employees.”

Although a trade union is an unincorporated association but it may sue
and be sued and be prosecuted under its registered name. This gives the
trade union a form of corporate personality. It is done so as to
facilitate any criminal and civil proceeding. Section 27 of the Act
provides that:

(1) A registered trade union may sue and be sued and be prosecuted under
its registered name.
(2) An unregistered trade union may sue and be sued and be prosecuted
under the name by which it has been operating or its generally known.

Section 25 of the Act provides that every trade union shall be liable on
any contract entered into by it or by an agent acting on its behalf.
This discussion proves that the trade unions have been given certain
rights and privileges which are not given to other unincorporated
associations. In spite of this fact, they are not separate legal
entities of their own and cannot be treated as corporations.

2.3 Natural Persons


Discussed below are the provisions of the law of persons on various
natural persons.

  • Minors
    A minor is also known as an infant. He is a person who is below the
    age of majority. A person who has attained the age of majority is a
    major or an adult. The Age of Majority Act (Cap 33) provides that a
    person shall be of full age and cease to be under any disability by
    reason of age on attaining the age of eighteen years. The infants
    can sue and be sued in tort. The age of criminal responsibility is
    at the age of eight years. An infant is not eligible to vote until
    he has attained the age of eighteen years and whose name appears on
    the register of voters (Section 43(1). Constitution of Kenya). An
    infant can own personal property. As regards the immovable property,
    an infant’s name can be entered in the register as the owner of
    registered land (Section 113(1) of the registered Land Act (Cap
    300). With exception of this right, an infant can not own immovable
    property. Minority is a disability in the sense that there are
    certain things which a minor can not do or be made liable for e.g. a
    minor cannot get a driving license. Special rules governing the
    minors in respect of contracts, property, succession, liability in
    torts and other areas of law, will be dealt with in their respective
    places in the chapters that follow.
  • Legitimation
    A legitimate child is a child who is born within the wedlock
    (lawfully married) of the parents. On the other hand, an
    illegitimate child is a child who is born outside wedlock.
    Legitimation is the process by which an illegitimate child becomes
    legitimated. It is brought by the subsequent marriage of the parents
    of a child who was born illegitimate. Thus, if A and B, being
    unmarried, beget a child C, C is an illegitimate child; but if A and
    B subsequently get married, C is said to be legitimated and he
    thereby becomes a legitimate child. The Legitimacy Act (Cap 145)
    provides that an illegitimate child can be legitimated by the
    subsequent marriage of his parents. Section 5 of this Act provides
    that an illegitimate person after becoming legitimate is entitled to
    take any interest:
  1. In the state of an intestate dying after the date of legitimation, or
  2. Under any dispution coming into operation after the date of
    legitimation; or
  3. By descent under an entailed interest created after the date of
    legitimation

He is treated as legitimate person as he had been legitimate. There is
only one limit to this right i.e, when property devolves on children and
the question of seniority arises, a legitimated person is deemed to have
been born on the date of his legitimation.
Under the Law of Succession (Cap 160), the term child also includes an
illegitimate child. This in effect gives an illegitimate child the same
claim on his father’s estate as a legitimate child. Under the customary
law, an illegitimate child has the same rights as a legitimate child.

  • Adoption
    Adoption is the process by which parental rights are transferred
    from the natural parents of a child to other persons authorized by
    law. An infant can be adopted so that the relationship between the
    child and the adopter is similar to that of the parent and child.
    The adoption is governed in Kenya by the Adoption Act (Cap 143) An
    adoption order has the effect of vesting in the adopter all rights,
    duties, obligations and liabilities which were previously vested in
    the parent(s) or guardian(s) of the adopted child. And after
    adoption, the adopter becomes responsible for the custody,
    maintenance and education of the adopted child, and he has a right
    to consent or dissent to the marriage of the adopted child. Indeed,
    the adopted child is much in the same position as a child born to
    the adopter in lawful wedlock even in matters of family settlements
    and inheritance. The infant who is adopted will have also the same
    rights to the adopter’s property as if he were his real child. A
    resident magistrate’s Court has the jurisdiction to hear and issue
    adoption orders where all the consents required, have been given and
    where the adoption case is straight-forward. In other cases, the
    High Court makes Adoption Orders. Any person aggrieved by the making
    or refusal of an adoption order can appeal to the Court of Appeal.
  • Guardianship
    An infant’s interests are normally protected by his parents. Where
    an infant has no parent there is need for a guardian to play this
    role. An infant whose interests are looked after by a guardian is
    known as a ward. The law relating to the guardianship and custody of
    infants is contained in the Guardianship of Infants Act (Cap 144).

Section 3 of the Act provides that:
(1) On the death of the father of an infant, the mother shall be the
guardian of the infant, either alone or jointly with any guardian
appointed by the father. When no guardian has been appointed, the court
may appoint a guardian to act jointly with the mother.
(2) On the death of the mother of an infant, the father shall be the
guardian of the infant, either alone or jointly with ant guardian
appointed by the mother. When no guardian has been appointed, the court
may appoint a guardian to act jointly with the father.
(3) Where an infant has no parent, no guardian of the person and no
other person having parental rights with respect to it, the court, on
the application of any person may appoint the applicant to be the
guardian of the infant. The court may remove guardians, if it is deemed
to be in the welfare of the infants. The court has the supervisory
powers of control over a guardian. A guardian exercises control over an
infant and is responsible for his education, maintenance and welfare.
For example, before an infant between the ages of sixteen and eighteen
years can marry, the consent of the guardian is required. A guardian has
power over the estate and the person. The guardian must have regard to
the welfare of his ward.

  • Mentally Disordered Persons
    A mentally disordered person is also known as a person of unsound
    mind. Like a minor, he lacks capacity to do certain things. The
    insanity affects a person’s legal capacity on many ways. The law
    recognizes that such persons may be exploited or taken advantage of
    and that some measure of protection is required. The mental
    Treatment Act (Cap 248) provides some measure of protection,
    treatment, care of mentally disordered persons and the custody and
    the management of the property of such
    persons.

A mentally disordered person is subject to certain disabilities. These
are as under:

  1. He does not have the right to vote.
  2. A marriage contracted by any person of unsound mind is not valid
    [Matrimonial Causes Act Chapter 152, Section 14(1) (f)].
  3. Insanity is a defense to a prosecution for any crime, although the
    accused must prove that he was insane at the time the crime was
    committed.
  4. The contracts of mentally disordered persons are voidable at the
    option of the mentally disordered persons.

The mental Treatment Act (Cap 248) requires that a person of unsound
mind must be admitted to a mental hospital. Any such person may be
received as a voluntary patient into a mental hospital if he has
attained the age of sixteen years. Any person under that age can be
received as a voluntary patient if a parent or guardian is so desirous.
A magistrate can also make a reception order to admit a person of
unsound mind into a mental hospital. This order is made if it is proved
that the person is of unsound mind. It also requires the report of a
medical practitioner. Under this Act, the court may also make orders for
the management of the estate of any mentally disordered person and for
the guardianship of such person by any near relative or by any other
suitable person.

2.4 Provisions of the law of persons on Marriage
Marriage is said to be a contractual
relationship. It is viewed as a contract between a man and his wife. It
gives rise to certain rights and duties.

The Law of Kenya recognizes the following four systems of marriage:

  1. Statutory Marriage
  2. Customary marriage.
  3. Hindu marriage
  4. Islamic marriage

The parties to a statutory marriage must each have capacity to marry.
This capacity is determined by their age, sex and marital status. Except
in the case of a widower or a widow, marriage age is generally 21 years.
A person below this age can only contract a marriage with the consent of
his father, or the mother in case the father is dead or of unsound mind
or absent from Kenya. As regards sex, the parties to the marriage must
be male and female. The persons of same sex have no capacity to marry.
Regarding marital status, each of the parties to the intended marriage
must be single. A marriage is null and void if it is celebrated while
the former husband or wife of either party is still alive and the
previous marriage is till in force. It makes no difference that the
previous marriage was celebrated under customary law. Finally, a
marriage is null and void if the parties to it are within the prohibited
degrees of consanguinity or affinity. This means that the close
relatives, such as brothers and sisters have no capacity to marry each
other. The persons of unsound mind, i.e. lunatics and idiots, have no
capacity to marry.

Citizen or Nationality


Nationality or citizenship refers to a person’s political allegiances to
some state in return for which he is afforded protection by the state.
Each independent state has right who are the nationals or citizen. The
law relating to citizenship and the nationality of Kenya is contained in
the constitution of Kenya and the Kenya citizenship Act (Cap. 170)

2.5 Provisions of the law of persons on Acquisition of Citizenship
Citizen of Kenya may be acquired in four different ways. These are 1) by
birth, 2) by descent, 3) by registration, 4) by nationalization
These are explained below

  1. By Birth
    Citizen by birth is determined by the fact of being born in Kenya
    and also by citizenship of a person’s parents or grandparents. All
    persons born in Kenya who on 11th December 1963 were either citizens
    of the United Kingdom or British protected persons automatically
    became Kenyan citizens on Independence Day (12th December 1963) if
    either of their parents had been born in Kenya. A person born in
    Kenya after 11th December 1963 shall become citizens of Kenya.
  2. By descent
    A person born outside Kenya after 11th Kenya after 11th December
    1963 becomes a citizen of Kenya on the day of his birth if on that
    day his father is a Kenya citizen. This citizenship is by descent
    only if at that time of his birth his father was Kenya citizens
    other than a citizen by descent born outside Kenya do not acquire
    the country’s citizenship from him or his father. Thus paternity is
    given prominence in the determination of citizenship by descent.
  3. By registration
    Any woman who marries a citizen of Kenya may apply for registration
    and be granted citizenship. Similarly, a person of full age who is a
    citizen of a commonwealth country or a specified African country who
    has been ordinarily resident in Kenya for five years may be
    registered as a Kenya citizen upon making an application for this
    purpose.
  4. By naturalization
    Section 93 of the Kenya constitution Act provides that an alien may
    apply to be a citizen and he may be granted with a certificate of
    naturalization if:
  • He is of full age
  • He has resided in Kenya for one year before the application
  • He has resided in Kenya four a total of four years during the seven
    years before the one year in paragraph (b)
  • He is of good character;
  • He has an adequate knowledge of the Swahili language; and
  • He intends to remain a resident, if naturalized

Note: The grant of citizenship by naturalization is purely discretionary

2.6 Loss of Citizenship
There is two ways in which citizenship can be lost. These are explained
under

  1. By Renunciation
    A citizen of Kenya who is also a citizen of some other country, is free
    to renounce his Kenya citizenship but he may do so only if he is of full
    age and capacity. For renunciation citizenship, he is required to make a
    declaration in prescribed manner. He ceases to be a citizen of Kenya
    upon registration of the declaration. A person who is a citizen of Kenya
    and also some other countries at the age of twenty one ceases to be a
    citizen of Kenya at the age of twenty three unless he has renounced the
    citizenship of that country.
  2. By deprivation
    The Kenyan citizenship also may be lost by deprivation. But the
    deprivation applies only to those citizens who acquire Kenya citizenship
    by registration or naturalization. A person may be deprived from
    citizenships in following cases:
  • Has shown himself to be disloyal towards or disaffected towards Kenya;
  • Has during the war in which the country was engaged, traded with or
    otherwise assisted the enemy.
  • Has, within five years of registration or nationalization been
    sentenced for more than twelve months imprisonment.
  • Has resided continuously abroad for seven years and has neither been
    in service of Kenya or an international organization which county is
    a member, nor registered annually at a Kenya consulate his intention
    to retain the citizenship or
  • Has obtained his registration or naturalization by fraud, false
    representation or concealment of a material fact.

2.7 Provisions of the law of persons on Domicile and Residence
A person’s domicile is the place where he permanently resides with an
intension to remain. Mere residence is not sufficient. Animus manedi
i.e. an intention to permanently remain must be established. In order to
establish the domicile of a
person, the following two elements are taken to consideration.

  • Actual residence
  • ‘Animus Manedi’ i.e. the intention to remain in that place or
    country Where these two elements co-exist, a person is said to have
    a domicile in that country. For example, a Ugandan citizen may
    decided= to live permanently in Kenya. In that case Ugandans
    acquires a domicile in Kenya. The law relating to domicile in Kenya
    is contained in the “The laws of Domicile Act (cap. 37).”

There are three types of domicile: origin, choice and dependence. These
are explained as under:

  1. Domicile of Origin
    A person acquires his domicile of origin at birth. A legitimate child
    inherits its father’s domicile (S.3), an illegitimate child inherits its
    mother’s (S.3) and under common law a founding (i.e. an abandoned child)
    has its domicile of origin continuous until he acquires a new one (S.4)
  2. Domicile of Choice
    ‘A man acquires a new domicile by taking up his fixed habitation in a
    country which is not that of his domicile of origin.’ (S.8) He is then
    said to have acquired a domicile of choice, where upon the domicile of
    origin is relinquished. He may however later resume his domicile of
    origin. A domicile of choice continuous until the former domicile is
    resumed or until another domicile is acquired. It is important to note
    that the only person of full age and capacity may acquire the domicile
    of choice. For example a Kenyan may decide to live in Tanzania
    permanently. In this case, he acquires Tanzania domicile though he
    remains a Kenyan citizen.
  3. Domicile of Dependence
    Domicile of dependence is also sometimes described as dependent
    domicile. A person is said to have this kind of domicile if his domicile
    necessarily changes with that of another person on whom he is dependant.
    A woman acquires the domicile of the husband on marriage. An infant
    acquires the domicile of the father.

Domicile and Residence
A place where a person lives, whether permanently or temporarily, is his
residence. A person’s residence determines his liability of taxation,
i.e. he is subject to the place where he resides; it also determined his
status in war time-a person who is resident in a country with Kenya is
engaged in war is automatically an enemy. Residence as such must be
distinguished from domicile. A mere temporary stay is sufficient to
constitute one a resident of a particular area but to be domiciled in a
place one must intend to permanently remain there; residence is just one
of the two elements required to prove domicile. There are two reasons
which make it important to draw a distinction between the two; first to
determine the law applicable and secondly to determine whether the court
has jurisdiction in a
particular case. As already seen, a person’s family relations and
movable property are determined by the law of his domicile; they are not
determined by the law of the place where he might be temporarily
resident. Thus, if a domiciled Englishman takes up residence in Kenya
dies in Kenya living movable property succession to the property will be
governed by the government of England and not the law of Kenya.
Regarding jurisdiction, courts usually have jurisdiction over persons
who are resident within their territorial jurisdiction.

Domicile and Nationality
Domicile must be distinguished from nationality. While nationality is
referable to as political system in the sense that a person owes his
allegiance to the state that he is a national domicile on the other hand
is referable to as a legal system: a person’s family relations in these
matters like marriage and divorce, legitimacy etc, and also his movable
property are governed by the laws of his domicile. Secondly, it is
possible for a person to have a no nationality at all e.g. where he is
rendered stateless upon being deprived of his citizenship but every person must have a domicile at any one time. Thirdly, it is possible for a person to have dual citizenship, i.e. to be a citizen of more than one country at the same time but no one can have more than one domicile at the same time.

2.8 Provisions of the law of persons on proceedings against the State
The government may commit a civil wrong, just like an ordinary
individual. The law relating to proceedings against the state is
governed by the Kenya Government proceedings act (Cap.40). An aggrieved
person has a right to sue the government for the act and defaults of its
servants and agents. The government is liable for its own wrongful acts
as well as those committed by its servants if the servant himself would
have been liable in the first place.

Section 4(1) of this Act provides that the state may be sued in tort in
the following cases:

  • In respect of the torts committed by it servants or agent.
  • In respect of any breach of those duties which a person owes to his
    servants or agents at common law by reason of being their employer; and
  • In respect of any breach of the duties attaching at common law of
    the ownership, occupation, possession and control of property:

Summary for the topic

  1. Definition of legal personality
  2. Natural and artificial persons
  3. Rights and obligations of artificial and natural persons as provided
    by the law of persons
  4. Acquisition and loss of citizenship