3 Setting Up Legal Entities for Joint Ventures

This chapter discusses:

3.1 Understanding Legal Entities for Joint Ventures

You use the Legal Entities program (P09J10) to create the legal entities that are associated with a joint venture into the system. Legal entities can be companies, business units, projects, partners, or properties that are involved with the joint venture.

When you create a legal entity, the system stores the record in the Joint Venture Legal Entities table (F09J10).

Before you create legal entity records, you must create an address book record for the entity.

See ”Entering Address Book Records” in the JD Edwards EnterpriseOne Applications Address Book Implementation Guide.

When you create a legal entity record, you can specify the type of entity. Entity Type values are stored in UDC (09J/ET). Joint venture entity types are user-defined and can include:

  • Balancing Interest Owner

  • Inside Owner

  • Joint Venture Entity

  • Joint Venture Owner

  • Memo Owner

  • Non-Active Owner

  • Outside Owner

You also specify the legal name of the entity and the extended legal name when you create the record. The text that you enter in the Extended Legal Name field is stored as a media object attachment when you save the legal entity record. Entering the legal name and extended legal name in the entity record ensures that all documentation associated with the joint venture includes this important legal information.

Depending on your business needs, you might require that a legal entity's name be unique. You can set the Validate for Duplicate Data Entry processing option on the Edits tab of the Address Book MBF -PO program (P0100041) to specify how the system validates legal name data. You can set up the system to allow duplicate entries without any validation, to show a warning when duplicate entries are created, or to show an error, and prevent you from entering duplicate entries.

The version of the P0100041 that is used in the validation process is defined in the processing options of the P01012 version that is specified in the processing options of the Legal Entities program (P09J10).

See Also:

”Entering Address Book Records”, which contains information about entering address book information and setting up the processing options discussed in this chapter.

You can specify the voucher and invoice minimum amount when you create the legal entity. This value is used to determine when to create invoices or vouchers for this entity. The invoice minimum amount is in the currency specified for the legal entity in the Customer Master table (F0301), and the voucher minimum amount is in the currency specified for the legal entity in the Supplier Master table (F0401). For example, you might set up an entity with a minimum amount of 500 USD. If that entity, which is typically a joint venture partner, incurs a 100 USD cost, the system will not create an invoice at that time. When additional costs for that entity are created, and the total of those costs reaches 500 USD, the system will then create an invoice. The system prints the legal name and extended legal name from the legal entity record on invoices generated for joint ventures. The system retrieves this information from the legal entity record using the system date at the time the invoice is printed.

When you add partners to the Division of Interest (DOI) records for a joint venture, the system retrieves, if available, the legal entity information for the partners. Note that legal entity records are not required to include partners in a DOI. However, if you require the legal information that is associated with the legal entity program for reporting purposes, you should include the creation of legal entities as a required part of your joint venture setup process.

The records include effective dates, and the system retrieves the record that is effective based on the invoice or voucher G/L date used when creating joint venture invoices or vouchers. This ensures that the correct entity information is being used.

Partners who are also customers or suppliers might not want their standard payment terms indicating discounts applied to their joint venture invoices or vouchers. They can override their standard payment terms by specifying invoice and voucher payment terms that will be associated with their legal entity records. The system applies the payment terms from the legal entities when you generate invoices or vouchers.

3.2 Understanding Processing Options for the Legal Entities Program (P09J10)

When you set the processing options for the Legal Entities program (P09J10), you specify the version of the Address Book Revisions program (P01012) that the system uses when creating legal entity records. The version of the P01012 that you specify in these processing options also includes a version of the Address Book MBF master business function (P0100041). The value in the processing option in this version of the P0100041 is used to determine how the system validates duplicate legal names.

Depending on your business needs, you might require that an entity's legal name be unique. You can set the Validate for Duplicate Data Entry processing option on the Address Book MBF -PO program (P0100041) to specify how the system validates legal name data. This option is available on the Edits tab of the processing options.

If you leave the option blank, the system does not search for duplicate entries. If you enter 1 in this option, the system displays a warning when duplicate legal names are found, but allows you to enter or save the record. If you enter 2 in this option, the system displays an error when duplicate legal names are found, and does not allow you to enter or save the record.

3.3 Managing Legal Entities for Joint Ventures

You can enter legal entities for joint ventures in the EnterpriseOne system using the Legal Entities program (P09J10) and later update them when required.

3.3.1 Prerequisite

Before you complete the tasks in this chapter, set up the Address Book (P01012) processing option for the Legal Entities program (P09J10).

In this processing option, you specify the version of the Address Book Revisions program (P01012) that the system launches when you access the P01012 program from the Form menu on the Work with Legal Entities, Add Legal Entity, and Edit Legal Entity forms. The system also looks at the processing options in the specified version of the P01012 program to determine which version of the P0100041 to use when determining how to validate whether duplicate legal names are allowed.

3.3.2 Entering Legal Entities for Joint Ventures

To enter legal entities for a joint venture:

  1. From the Joint Venture Management module (G09J), click Joint Venture Setup, and then Legal Entities.

  2. On the Work With Legal Entities form, review existing legal entity records.

  3. To add a new legal entity, click Add.

  4. On the Add Legal Entity form, complete these fields:

    • Address Number

      This is a required field. The entity must have an Address Number in order to be entered into the system. If you have not yet set up an address book record for the entity, you can access the Address Book Revisions form from the Address Book form menu.

    • Effective Date

      The system automatically uses the system date in this field. You can override this value. This is a required field.

    • Legal Name

      Enter a legal name (can be up to 80 characters). If you do not enter a value in this field, the system uses the address book alpha name as the default legal name.

    • Extended Legal Name

      Use this field to enter the extended legal name or description of the entity. This value is stored as a text media object when you enter the record.

    On the Joint Venture section of the form, complete these optional fields:

    • Entity Type

      Specify the entity type, as it relates to the joint venture. If the entity is involved in multiple joint ventures, the value that you enter here is the default entity type. If the entity type is different for each joint venture, you can override the entity type at the DOI or Approval List level.

    • Invoice Minimum Amount

      Use this field to specify a minimum amount for which you will generate an invoice to the joint venture entity when processing joint venture information. This value, if entered, overrides the value entered at the joint venture level for this specific entity. Therefore, you enter a value in this field only if the minimum amount for this entity is different than the value entered at the joint venture level.

      The invoice minimum amount is in the currency specified for the legal entity in the Customer Master table (F0301).

    • Voucher Minimum Amount

      Use this field to specify a minimum amount for which you will generate a voucher to the joint venture entity when processing joint venture information. This value, if entered, overrides the value entered at the joint venture level for this specific entity. Therefore, you enter a value in this field only if the minimum amount for this entity is different than the value entered at the joint venture level.

      The voucher minimum amount is in the currency specified for the legal entity in the Supplier Master table (F0401).

    • Invoice Payment Terms

      Use this field to indicate the default payment terms that will be applied when you generate an invoice to the joint venture legal entity. This value, if entered, overrides the value entered in the customer master record for the legal entity. Payment terms determine the due date, discount, and discount due date that the system assigns when you create an invoice.

      Partners who are also customers might not want their standard payment terms indicating discounts applied to their joint venture invoices. They can use this field to override their standard payment terms.

    • Voucher Payment Terms

      Use this field to indicate the default payment terms that will be applied when you generate a voucher to the joint venture legal entity. This value, if entered, overrides the value entered in the supplier master record for the legal entity. Payment terms determine the due date, discount, and discount due date that the system assigns when you create a voucher.

      Partners who are also suppliers might not want their standard payment terms indicating discounts applied to their joint venture vouchers. They can use this field to override their standard payment terms.

  5. Click OK to save the entity record.