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:
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Own property
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Trade
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Repay debt
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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.