Legal entity

Partnership, corporation, or other organization having the capacity to negotiate contracts, assume financial obligations, and pay off debts. In contrast with natural persons, legal entities are chartered by the states where they are organized. A corporation is a person in the eyes of the law, and it is responsible for its actions. It can be sued if it fails to live up to an agreement.

The term legal entity is used:

• to refer to a juristic person, an artificial entity that the law treats for some purposes as if it were a person, such as an incorporated organization.
• as a general term to describe all entities recognized by the law, including both juristic and natural persons.

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