This browser is too old to run Achievable.

Update it, or open this page in a current version of Chrome, Safari, Firefox or Edge. On an iPhone or iPad, update iOS: every browser there runs on the version of Safari that comes with it.

Achievable logoAchievable logo
Series 66
Sign in
Sign up
Purchase
Textbook
Practice exams
Support
How it works
Resources
Exam catalog
Mountain with a flag at the peak
Textbook
Introduction
1. Investment vehicle characteristics
2. Recommendations & strategies
3. Economic factors & business information
4. Laws & regulations
4.1 Securities laws
4.2 Definitions
4.2.1 Persons
4.2.2 Exempt & excluded
4.2.3 Issuers & securities
4.2.4 Broker-dealers
4.2.5 Agents
4.2.6 Investment advisers
4.2.7 Investment adviser representatives
4.2.8 The SEC & state administrator
4.2.9 Offers & sales
4.3 Registration
4.4 Enforcement
4.5 Communications
4.6 Ethics
Wrapping up
Achievable logoAchievable logo
4.2.1 Persons
Achievable Series 66
4. Laws & regulations
4.2. Definitions

Persons

2 min read
Font
Discuss
Share
Feedback

Definitions matter on exams that devote a large portion of questions to the legal aspects of finance. A rule only applies when the facts fit the rule’s definitions, so you need to know exactly what key terms mean.

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? A fire truck? A motorized skateboard? The definition determines whether the rule applies.

One of the first definitions to know is person.

Definitions
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

In everyday English, “person” usually means a human being. In legal and regulatory questions, person is much broader. It can mean:

  • A natural person (a human being), and
  • Many kinds of organizations and government bodies

So while you’re a person, the U.S. government is also a person, and so is a large corporation.

A practical way to think about this is that a person is a natural person or legal entity that can enter into legal contracts.

Definitions
Legal contract
A mutual agreement between two or more parties that is enforceable by law.

Examples: employment contracts, insurance contracts, option contracts

There are also important examples of non-persons to know. 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.

  • Minors can technically enter into contracts, but those contracts are generally unenforceable, and the minor can void the contract.
  • Incapacitation means someone can’t manage their own affairs or well-being, which prevents them from entering binding contracts. Common causes include dementia, mental illness, and a sustained lack of consciousness (e.g. in a coma).
  • Deceased individuals can’t enter into contracts.

Person

  • Any natural person (human being), or
  • Any legal entity

Non-persons

  • Minors
  • Incapacitated
  • Deceased

Sign up for free to take 3 quiz questions on this topic

Previous
Next  | 4.2.2 Exempt & excluded
All rights reserved ©2016 - 2026 Achievable, Inc.

Persons

Definitions matter on exams that devote a large portion of questions to the legal aspects of finance. A rule only applies when the facts fit the rule’s definitions, so you need to know exactly what key terms mean.

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? A fire truck? A motorized skateboard? The definition determines whether the rule applies.

One of the first definitions to know is person.

Definitions
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

In everyday English, “person” usually means a human being. In legal and regulatory questions, person is much broader. It can mean:

  • A natural person (a human being), and
  • Many kinds of organizations and government bodies

So while you’re a person, the U.S. government is also a person, and so is a large corporation.

A practical way to think about this is that a person is a natural person or legal entity that can enter into legal contracts.

Definitions
Legal contract
A mutual agreement between two or more parties that is enforceable by law.

Examples: employment contracts, insurance contracts, option contracts

There are also important examples of non-persons to know. 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.

  • Minors can technically enter into contracts, but those contracts are generally unenforceable, and the minor can void the contract.
  • Incapacitation means someone can’t manage their own affairs or well-being, which prevents them from entering binding contracts. Common causes include dementia, mental illness, and a sustained lack of consciousness (e.g. in a coma).
  • Deceased individuals can’t enter into contracts.
Key points

Person

  • Any natural person (human being), or
  • Any legal entity

Non-persons

  • Minors
  • Incapacitated
  • Deceased

More from Definitions

  • Exempt & excluded
  • Issuers & securities
  • Broker-dealers
  • Agents
  • Investment advisers