Quick Answer
Under the Uniform Securities Act, a "person" is one of a specific list of individuals and entities: individuals, corporations, partnerships, trusts whose beneficiary interests are securities, unincorporated organizations, and governments. Nothing in the definition excludes minors, deceased individuals, or the mentally incompetent; legal capacity to contract is a separate question.
Before you can understand who must register, who can be regulated, and who can be penalized under the Uniform Securities Act (USA), you need to know who qualifies as a "person."
Who Counts as a "Person"?
- A person means an individual, a corporation, a partnership, an association, a joint-stock company, a trust (where the interests of the beneficiaries are evidenced by a security), an unincorporated organization, a government, or a political subdivision of a government
- The definition is intentionally broad: it covers both natural persons (individuals) and legal entities (corporations, partnerships, trusts, governments)
| Entity | Notes |
|---|---|
| Individual | A human being |
| Corporation | Including LLCs and other business entities |
| Partnership | General and limited partnerships |
| Association | Trade groups, professional associations |
| Joint-stock company | A hybrid between a partnership and corporation |
| Trust | Where beneficiary interests are evidenced by a security |
| Unincorporated organization | Clubs, informal business groups |
| Government | Federal, state, or foreign governments |
| Political subdivision | Cities, counties, municipalities |
Exam Tip: Gotchas
- Do not assume the definition excludes minors, deceased individuals, or the mentally incompetent. The statute states no such carve-out. Whether someone can enter an enforceable contract is a separate legal-capacity question from whether they are a "person" for purposes of the Act. A question involving a deceased individual instead turns on the estate or legal representative, not on erasing that individual from the definition.
Does an Ordinary Trust Count?
Not every trust is a "person." Only a trust whose beneficiary interests are evidenced by a security meets the definition. A garden-variety family trust with no security-based beneficiary interests falls outside it.
Are Governments "Persons"?
This is one of the most counterintuitive parts of the definition. When a city issues municipal bonds, the city is acting as a "person" under the USA; specifically, as an issuer.
- State and local governments regularly issue bonds to fund infrastructure, schools, and public projects
- Under the USA, these governments are "persons" who issue securities
- This means the Act's provisions can apply to government issuers, not just private companies
Exam Tip: Gotchas
- A government IS a "person" under the USA. A municipality that issues bonds is a "person" acting as an issuer. "Person" is not limited to individuals or private entities.
What Should You Check on Exam Day?
- Do not pick "minor," "deceased individual," or "mentally incompetent individual" as an excluded answer choice for "person." The USA does not exclude them.
- Confirm a trust's beneficiary interests are evidenced by a security before calling it a "person."
- Remember a government or political subdivision that issues bonds is a "person" acting as an issuer.