What is it legal entity

A legal entity is an organization that has passed a legally approved registration procedure, is a subject of law, has property rights and legal capacity to sue and be sued in its own right.

What are the required attributes of a legal entity?

The following attributes should have place:

• constituent documents reflecting the system of management bodies (sole one, where there is one head; collegial one, where several people make decisions), forming and expressing the will of the legal person, and subdivisions performing certain functions and specified in the charter;
• statutory fund and bank account;
• separate property, property and in certain cases subsidiary liability;
• the opportunity to appear in court on its own behalf, indicating the legal form and individual name.

What is the classification of legal entities?

They can be commercial and non-commercial. It depends on the intended purpose.

The purpose of a commercial enterprise is to make a profit and distribute it among participants.

The goal of a non-commercial enterprise is any activity designed to benefit society. If a non-profit organization makes a profit, it all goes to achieve the originally stated goal.

According to the form of ownership, legal entities are divided into governmental and non-governmental organizations. According to the composition of the founders – unions or associations (only legal entities as the founders), unitary organizations (only state founders), all others (any other founders).

What is the legal capacity of legal entities?

From the moment of registration in the public register, the legal entity obtains legal capacity, which can be general and limited.

General one gives civil rights and obliges to perform certain civil duties. It is owned by commercial institutions, regardless of the activities specified in the documents. There may be exceptions – unitary enterprises of the state type and those organizations that work in one sphere, for example, banking or insurance.

Non-profit institutions have limited legal capacity, as they are created for specific purposes, which are achieved in specific ways.

Where is a legal entity situated?

A legal entity must necessarily have a location. Usually, this is an address where there aren’t any enterprises – the so-called legal address. A postal address is used for communication and official correspondence. There is also the concept of the actual address – the place where the organization is really located.

In which case the legal capacity of a legal entity terminates?

Termination is possible in case of the reorganization or liquidation of a legal entity.

Reorganization is the completion of the existence of a legal entity with the transfer of rights and obligations to other people. This can be a separation, transformation, or merge.

Liquidation is the completion of the existence of a legal entity without the transfer of rights and obligations to other people.

It is possible to liquidate a legal entity by agreement of the founders and without it, for example because of violations or bankruptcy.

Procedures for the termination of activities of a legal entity are completed when the corresponding record is made in the state register.