What is a legal entity/person

A legal entity, also known as a legal person, is a term used to describe a legal subject that is not a physical person, and that outwardly represents a separate entity that is allowed to enter into agreements as if it were a real, physical person.

A legal entity is a legally created organization that has capacities similar to an individual person. This means that a legal entity can sign contracts, incur debts, and be answerable in lawsuits.

A practical consequence of an organization being considered legally as if it were a person is that this entity can be part of legal disputes and lawsuits, both as plaintiff and defendant.

Legal entities or persons are therefore financially and legally responsible for themselves.

Examples of legal entities or persons include:

  • state, municipality, county municipality, and organizations subject to these
  • businesses
  • foundations
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