LEGAL PARSPECTIVE: Companies and right of Litigation – Suing and being sued ,y Dr AbdelGadir Warsama, Legal Counsel

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Permanent questions, to me, related to rights over property are those relating to legal actions, including rights of suing and being sued by others. The difficulties in the way of suing or being sued by an unincorporated bodies are there, where in many circumstances it was pointed out that they were partially supported by the trust device and more satisfactorily, by statutory provisions.

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The problem is obviously of the greatest practical importance in connection with trading bodies and in fact it has been clearly solved in the case of partnerships by allowing each partnership to sue or being sued in the firm’s name. Hence there is no difficulty, as the pure mechanics of suit are concerned, although there may still be complications in enforcing judgment especially if bankruptcy is resorted to.

In the case of other unincorporated bodies that are not subject to special statutory provisions, the problems of suit are still serious, could be due to sorting out the legal responsible person. Sometimes the managing committee or other agents may be personally liable or entitled. Otherwise, the only course could be taking a “representative action” whereby under certain conditions, one or more persons may sue or be sued on behalf of all interested parties. But resort to this procedure is only available subject to compliance with a number of conditions. The result of this, unfortunately, could be very embarrassing to many parties when they wish to enforce their rights.

Needless to say none of these difficulties arises when an incorporated company is suing or being sued, the company as a legal person of “juristic entity” can take action to enforce its legal rights or to be sued for breach of its legal duties. This gives great advantage to companies and the concept of corporate legal entity. Now, all companies, are required to mention in their memorandums of association and of understanding, that, they can sue and be sued by others. Based on this, dealing with companies, is more secured as you can easily take legal actions against any company if you have any right or obligation with such company. Moreover, it should be mentioned in the documents of the company that, the Chairman is the legal representative of the company in all dealings and also in case of litigation. So, make sure with whom you are dealing, otherwise you may find difficulty in litigation.

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