Which legal principle best describes the strong juridical personality of a corporation?

The concept of a corporation possessing a strong juridical personality is best encapsulated by the right of succession or continuity of existence. This principle implies that a corporation continues to exist independently of changes in ownership or the status of its shareholders. For example, even if all shareholders are replaced, the corporation remains a legal entity, capable of owning property, entering into contracts, and undertaking legal actions.

This continuity of life ensures stability and predictability in business operations, which is essential for investors and creditors. They can rely on the fact that the corporation will persist even when individual members of the company change. This durability is a foundational characteristic of corporations, distinguishing them from partnerships or sole proprietorships that may dissolve more easily under changes in personal circumstances.

While limited liability provides protection to shareholders against the debts and obligations of the corporation, and the separate entity theory underscores the distinct legal standing of the corporation, it is the notion of succession that truly reflects the enduring nature of a corporation, irrespective of the dynamics between its shareholders. The business judgment rule, which allows directors the freedom to make decisions without being second-guessed by courts as long as those decisions are made in good faith, also plays a critical role but does not directly address the corporation's continuity or enduring legal status