Legal Entity represents a legal company for which Fiscal and Tax reports are prepared. A Legal Entity can Model to an Enterprise, a Designated Legal unit which is recognized by legal authorities in a country.
Legal entity is a business entity that is known to exist to the outside world. Internal organizations or divisions are not legal entities themselves, but are just part of it. In the Multi Organization structure various legal entities could share the same ledger.
Both legal entities and operating units are associated with the ledger and the relationship between the legal entity and operating unit is derived based on the ledger.
A legal Entity can be associated to Single Ledger, Multiple Legal Entities can be Associated to a Ledger.
The Legal Entity Configurator allows you to define legal entities and establishments in the Oracle system to achieve legal compliance for business activities handled by the Oracle E-Business Suite.
Create legal entities with minimum required information using the Create Legal Entity page.
If you create a legal entity from an existing organization, the country, organization name, and organization number are defaulted from the organization. In this case, the organization number is not updatable even if the HZ: Generate Party Number profile option is set to No.
When you create a legal entity, the main establishment is created automatically.
The legal entity territory, name, address, effective date, and other information are defaulted to the main establishment. The establishment inherits the registration number of the legal entity only if the establishment does not have it own number.
Setup >> Financials >> Accounting Setup Manager >> Accounting Setup
Enter the required fields (See example below)
Territory: The territory where the legal entity is registered. This list displays territories at the country level and shows only territories for which the identifying jurisdiction has been defined. Therefore, the territory determines the identifying jurisdiction to which the legal entity needs to register. The territory also determines the context for the information that needs to be displayed in the General Information region. For Canada the BIN number is one such field
Legal Entity Identifier: The identification number used to uniquely identify the legal entity. It is displayed only when the LE: Generate Legal Entity Identifier profile option set to No and you must enter it manually. If this option is set to Yes, the legal entity identifier is generated automatically based on the International Organization for Standardization (ISO) code of the country of registration, plus the registration number of the identifying jurisdiction, which qualifies an entity to be a legal entity in that particular territory.
Registration Number: The identifying jurisdiction determines the prompt for the registration number (in the U.S., the EIN/TIN). The Establishment registration prompt is displayed if it is defined for the identifying jurisdiction. In this case the main establishment is created with this registration number. The registration
number must be unique within a jurisdiction.
Legal Address: The address a legal entity uses to register with a legal authority. A legal entity may use different addresses for different authorities and hence, may have more than one registered address. This legal address must be located within the territory entered.
Place Of Registration: Optionally enter the place of the legal entity registration.
Inception Date Optionally enter the date of legal entity registration (creation). It can be on or before the system date and on or after legal entity's inception date but must not be a future date.
Once the above information is entered, select "Save and add details"