Overview of Legal Entities

A legal entity is a recognized party with rights and responsibilities given by legislation.

Here are the rights and responsibilities of legal entities:

• Own property

• Trade

• Repay debt

• Account for themselves to regulators, taxation authorities, and owners according to rules specified in the relevant legislation

Their rights and responsibilities may be enforced through the judicial system. Define a legal entity for each registered company or other entity recognized in law for which you want to record assets, liabilities, expenses and income, pay transaction taxes, or perform intercompany trading.