Legal Entity
An organization or business recognized by law as having rights and responsibilities separate from its owners.
Implications
An organization or structure that is recognized by law as having rights and obligations, such as a corporation, partnership, or sole proprietorship, often used to conduct business, enter contracts, and protect personal assets from business liabilities.
Example
Example: A tech startup incorporates as a legal entity (corporation) to separate the founders� personal assets from the business�s liabilities, enabling it to enter contracts, raise capital, and operate as an independent business.
Related Terms
Different from an individual or informal group, a legal entity is a formally recognized organization that can own property, incur debt, and be held legally accountable, providing a structured way to conduct business.
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