Understanding the Bracket Theory

The 'Bracket Theory', also known as the Concession Theory or Fiction Theory, explains the nature of juristic personality, particularly for corporations.

This theory posits that legal personality is granted to entities like corporations by the state or law. It's a legal construct, not an inherent reality.

Bracket Theory Explained

• The law effectively places a 'bracket' around an entity (like a company) to give it legal personality.
• This 'juristic personality' means the entity is treated as a person in the eyes of the law, distinct from the natural persons (shareholders, directors) who constitute or manage it.
• The law organizes this personality, defining the entity's rights, duties, and liabilities separately.

Core Concept: Juristic Personality

The essence of the Bracket Theory is that personality is a legal device. Law organizes juristic personality, creating a distinct legal entity. This aligns directly with the idea that Law puts a bracket around the persons, by organising juristic personality.