A legal entity is any business organization that has been legally authorized to enter into contracts, including those for the purchase, sale or lease of real estate. The interests of legal entities may be individually owned, owned by another legal entity, or held in trust. This type of organization can refer to an association, a trust, a property, a corporation, or an individual. All of these entities are legally capable of being held accountable for activities contrary to the law, entering into agreements, contracting and paying debts, being sued and suing other entities and assuming obligations.
However, they cannot hold office or vote. To check the legal status of a company, a person can consult the website of the Global Foundation for Legal Entity Identifiers (GLEIF). Each legal entity receives a legal entity identifier (LEI), a 20-character code that serves as a reference for connecting a company to financial information. This legal name may be changed in the future, but a business entity can only have one legal name at any given time.
Legal entities are important for compliance and legal operations teams as they provide an efficient way to manage their operations. Entity management software can help manage them by providing an easy way to track and monitor all the activities related to the legal entity. This software can also help with filing taxes and other administrative tasks. In summary, a legal entity is any business organization that is legally authorized to enter into contracts and assume obligations.
It is essential for compliance and legal operations teams as it offers an effective way to manage their operations. Entity management software can help manage them by providing an easy way to track and monitor all the activities related to the legal entity.
