1. Persons Class 5 NAGY, Csongor István

2. The life of law consits of legal subjects, legal objects, rights and obligations.

3. Right and obligations James: Rights – receiving monthly wage from Microsoft Obligations – working daily for Microsoft from 8.00-17.00; paying back the debt to Jerry due in 10 days Jerry: Rights – owning a flat in the city; claiming payment from James in 10 days Obligations – paying maintenance to his child; paying the renovation costs of the fault due in 10 days. Microsoft: Rights – using the workforce of James on a daily basis Obligations – paying wage to James

4. A world of subjects JamesJerryMicrosoft

5. Persons as holders of rights/obligations Legal personality: the ability to the holder of rights and obligations. Legal capacity or capacity to act (especially contractual capacity): the ability to influence your rights and obligations with you own acts.

6. If you have legal personality You may be the owner of something (legal title). You may be a creditor: somebody owes money to you. You may be a debtor.

7. Who have legal personality? All human beings: general, equal and unconditional. Not having legal personality means being a thing (servi res sunt): person = legal personality. Some organisations (organized groups of persons): partnerships, companies, corporations, foundations, universities, municipalities etc.

8. Legal capacity (capacity to act) If you have legal capacity (capacity to act), you may – Conclude a contract – Sell your house – Buy a car – Rent a flat – Establish a company

9. When is your legal capacity restricted (decreased)? Minors: parents Mentally disabled/handicapped Due to age Due to mental illness Have a guardian Under the influence of alcohol/drugs

10. Persons Legal persons (artificial, moral persons) For-profit entitis Non-profit entities Natural persons

11. Legal capacity, capacity to act and legal persons A legal person has legal personality: it may be the holder of rights and obligations (owner, debtor, creditor, it may sue and may be sued). Only natural persons have capacity to act (the legal person does not exist, physically). Consequently, it is always a natural person who acts on behalf of the legal person: representative (~ the guardian to the minor).

12. Specific types of business entities

13. Types of business entities Partnerships: general and limited partnership Limited liability company Stock corporation (shareholding company)

14. General Partnership Unlimited & joint and several liability! Small, family businesses. Easy to establish and to administer. Representative: managing partner. No minimum capital requirement.

15. Limited partnerships The same rules are applicable as in case of general partnerships, with the exception that there is a limited partner. The liability of the limited partner does not exceed the money he/she invested. The question whether the limited partner may take part in the management of the company depends on the local law.

16. Limited liability company Limited liability company (LLC ~ USA), Private company limited by shares (Ltd. ~ UK), GmbH (Germany), Kft. (Hungary), SARL (France) Limited liability of the members, who own shares (called business quota in Hungary). Representation: managing director Transfer of shares: some restrictions may apply, e.g. right of preemption, assent of the members’ meeting.

17. Stock corporation Closely & publicly held stock corporation. Publicly held stock corporation: shares/stock publicly traded on the capital market (stock exchange) ~ in case of a closely held corporation public trading is forbidden (similar to LLC). Board of Directors, Supervisory Board, Auditors, Assembly.