Who Counts as a Person
Why definitions matter
Definitions matter on exams that test legal aspects of finance. When a regulation or rule applies only to a specific entity, item, or circumstance, you need the exact definition of key terms to decide whether the law applies.
A simple example is a highway speed limit that applies to “automobiles.” That sounds straightforward - until you ask what counts as an automobile. Does an ambulance qualify? A fire truck? A motorized skateboard? Legal questions often turn on that kind of definition.
One of the first definitions to know is the term ‘person.’
Definitions
🔑 Person (statutory definition, word-for-word):
An individual; corporation; business trust; estate; trust; partnership; limited liability company; association; joint venture; government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity
🔑 Legal contract (definition, word-for-word):
A mutual agreement between two or more parties that is enforceable by law.
Examples: employment contracts, insurance contracts, option contracts
| Term | Definition | Example |
|---|---|---|
| Person | “An individual; corporation; business trust; estate; trust; partnership; limited liability company; association; joint venture; government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity” | You, the U.S. Government, a large corporation |
| Legal contract | “A mutual agreement between two or more parties that is enforceable by law.” | Employment contracts, insurance contracts, option contracts |
In everyday English, “persons” usually means people you know - friends, family, coworkers. In legal and regulatory questions, though, don’t assume “person” means a natural person (a.k.a. a human being). While you are a person, so is the U.S. Government, and so is a large corporation.
A useful way to think about it: a person can be a human being or a legal entity that can enter into legal contracts.
What IS a person vs. what is NOT a person
| IS a person (included in the definition) | Is NOT a person (never considered a person) |
|---|---|
| An individual | Minors |
| Corporation | Incapacitated |
| Business trust | Deceased |
| Estate | |
| Trust | |
| Partnership | |
| Limited liability company | |
| Association | |
| Joint venture | |
| Government | |
| Governmental subdivision, agency, or instrumentality | |
| Public corporation | |
| Any other legal or commercial entity |
The following parties are never considered persons: Minors, Incapacitated, Deceased.
A common reason for non-person status is the inability to enter into legally binding contracts.
| Non-person | Why they are not a person |
|---|---|
| Minors | “While minors can technically enter into contracts, those contracts are generally unenforceable, and the minor can void the contract at any time.” |
| Incapacitated | “Incapacitation occurs when someone is unable to manage their own affairs or well-being. This also prevents them from entering binding contracts. Common reasons include dementia, mental illness, and a sustained lack of consciousness (e.g. in a coma).” |
| Deceased | “Deceased individuals can’t enter into contracts.” |
Note the minor trap: a minor can technically enter a contract, but it is generally unenforceable and voidable at any time by the minor — which is why a minor is a non-person.
Key points
Person
- Any natural person (human being), or;
- Any legal entity
Non-persons
- Minors
- Incapacitated
- Deceased
Sources
Primary/official references for the material in this chapter. Every link was fetched and returned HTTP 200 on 2026-08-15.
| # | Source | Publisher |
|---|---|---|
| 1 | Uniform Securities Act 1956 with NASAA updates — the tested statute | NASAA |
| 2 | Advisers Act 1940 — investment adviser definition and exclusions | Cornell LII (15 U.S.C. 80b-2) |
| 3 | Uniform Securities Acts (1956 / 1985 / 2002) index | NASAA |
| 4 | Achievable Series 65 — chapter 4.2.1 | Achievable (course text) |