Legal Entity

Definition

A Legal Entity is any Legal Person that is a partnership, proprietorship, trust, association, corporation, public entity or governmental organization that has formal legal status within a certain jurisdiction. A legal entity has the Legal Capacity to be a Counterparty to agreements or contracts (e.g. financial or insurance contracts), may assume credit and other obligations and liabilities. Legal entities have rights and obligations under law and may be sued.

Examples

Examples of eligible legal entities from the financial industry include, without limitation:-

• all financial intermediaries
• banks and finance companies
• all entities that issue equity, debt or other securities for other capital structures
• all entities listed on an exchange
• all entities that trade stock or debt, investment vehicles, including mutual funds, pension funds and alternative investment vehicles constituted as corporate entities or collective investment agreements (including umbrella funds as well as funds under an umbrella structure, hedge funds, private equity funds, etc.)
• all entities under the purview of a financial regulator and their affiliates, subsidiaries and holding companies;- counterparties to financial transactions.

Classification of Legal Entities

Some useful classification dimensions:

• Nature: Natural persons versus purely legal entities
• Objectives: Commercial entities versus non-profit entities
• Size: From individuals to supra-national entities

Identification of Legal Entities

A Legal entity identifier (LEI) is a 20-character, alpha-numeric code based on the ISO 17442 standard developed by the International Organization for Standardization (ISO). It connects to key reference information that enables clear and unique identification of legal entities participating in financial transactions

Capacities

• Liability Capacity
• Litigation Capacity
• Signatory Capacity

Synonyms

• Artificial Person

See Also

• Barron's Dictionary of Banking Terms, Sixth Edition, 2012, definition of legal entity
• Black's Law Dictionary Free Online, see http://thelawdictionary.org/juridical-person/
• ISO 17442, Financial services - Legal Entity Identifier (LEI), first edition, 2012-06-01, section 3.1
• https://www.gleif.org/en/about-lei/common-data-file-format/lei-cdf-format/lei-cdf-format-version-2-1

Disclaimer

This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with or correctly interprets the concepts covered by the FIBO ontology.