A legal entity is any company or organization that has legal rights and responsibilities, including tax returns. It is a company that can enter into contracts as a seller or supplier and can sue or be sued in a court of law. An entity refers to a person or organization that has separate and distinct legal rights, such as an individual, company, or corporation. An entity can, among other things, own assets, conduct business, enter into contracts, pay taxes, sue and be sued.
An entity is capable of operating legally, suing and making decisions through agents, for example, a corporation, a state or an association. Unlike a natural person, it is a body created at the time of legal constitution, with a specific name and personality in the eyes of the legal system. A legal entity can be an individual, an association, a company, a company, or any social form allowed by the authorized legal framework. The management of legal entities is a business function required for any business operation that has one or more legal entities.
Simply put, a legal entity is a business unit that has legal rights and responsibilities that are separate from its owners.