What is a Legal Entity?

A legal entity has rights and responsibilities under commercial law, through registration with the country's appropriate legal
authority. A legal entity generally has:
- the right to own property and trade,
- the responsibility to repay debt,
- the responsibility to comply with labour law,
- the responsibility to account to company regulators, taxation authorities, and owners according to rules specified in the
relevant legislation.
What is an Establishment?
Establishments are the building blocks of legal entities. They are 100 percent owned and controlled entities such as branches,
divisions, physical locations. In many countries, establishments need to be registered with local regulatory bodies and may
have their own activity codes (such as the SIC code in the U.S.). They are not liable to the outside world (cannot be sued
separately in court). To fulfil registration requirements in some countries at a local level, a legal entity must register a main
establishment.
Registration
Company registration is done in accordance with a particular legislation (commercial law, income tax law, civil law, company
law, etc., depending on the country). This registration confers the status of legal entity and therefore, the right to do business.
Registration information can be used on financial statements and legal reports.
Jurisdictions
A jurisdiction is a combination of the legislative category (labour law, transaction tax law, income tax laws, etc.) and the physical
territory to which legal rules are grounded. (For example the tax jurisdiction for Goods and Services tax in Australia is the
country of Australia.)
Jurisdictions must be set up before creating a registration. Some are seeded but it is also possible to create additional
jurisdictions for other registrations. The identifying jurisdiction is usually the first jurisdiction that the legal entity must register
with, in order to be recognized in its territory. The jurisdiction can also capture the registration code or number. There may be
a set of functions required by some registrations, for example payment of income tax and / or submission of annual declaration.
When a registration is created, the specific functions of the jurisdiction can be assigned to the legal entity.
Legal Authorities
A legal authority is a governing legal body that operates within a jurisdiction. For example, the ATO (Australian Tax Office) is the
legal authority for tax law in the Australia. Legal authority information is used on legal reports and financial statements in
some countries and is determined by the legislation of the jurisdiction. Defining a legal authority is not required for a legal
entity to transact and therefore, is not required to create a registration.
Legal Associations
Legal Associations provide a mechanism for associating business entities (non-legal constructs) and legal constructs (legal
entities, establishments). You can use the Establishment Details page to create associations between various attributes (such as
Operating Unit/ Inventory Organization /Inventory Location / Ship-to and Bill-to Location) to establishments. These associations
are mainly used for tax calculations.