A legal entity that represents the top level of your organizational hierarchy, as defined by the legal name entered for the company. This designation is only used to create an organizational tree, with the top holding company as the top tier, departments and country holding companies as the second level, and legal employers as the third tier. Represent your legal entities by at least one balancing industry value. You can represent it with two or three balance segment values if more detailed reports are needed. For example, if your legal entity operates in multiple jurisdictions in Europe, you can define balance segment values and assign them to legal reporting units. You can represent a legal entity with more than one balancing segment value. Do not use a single balance segment value to represent more than one legal entity. If you`ve already defined a list of legal entities for your business, you can download them from a spreadsheet. To use this option, first upload a spreadsheet template, then add your legal entity information to the table, and then upload it directly to your business configuration. You can export and import the table multiple times to enable revisions. Define jurisdictions and associated legal authorities to support the registration of multiple legal entities used by Oracle Fusion Tax and Oracle Fusion Payroll. When you first create a legal entity, Oracle Fusion Legal Entity Configurator automatically creates a legal reporting entity for that legal entity with a registry.

Several decisions to consider when creating legal entities. A legal person is a recognized party whose rights and obligations are established by law. Many large companies isolate risks and optimize taxes by creating subsidiaries. They create legal entities to facilitate regulatory compliance, separate operations, streamline taxes, establish contractual relationships, and isolate risks. Companies use legal entities to establish the identity of their business under the laws of each country in which their company operates. InFusion requires legal entities with legal employers, legal payroll units, tax return units, and legislative datasets for the United States, United Kingdom, France, Saudi Arabia, and the United Arab Emirates to employ and pay their employees in those countries. A legal entity can represent all or part of your company`s management framework. For example, if you operate in a large country such as the United Kingdom or Germany, you can merge each department in that country into a separate legal entity. In a smaller country, such as Austria, you can use a single legal entity to host all your business operations in all departments. In some cases, your legal entity is derived from your business entity processing the transaction. For example, your business unit A accepts the terms of transferring inventory to your business unit B. This transaction binds your associated standard legal entities to each business entity.

Oracle Fusion Procurement, Oracle Fusion projects, and Oracle Fusion Supply Chain applications are based on obtaining information about the legal entities in the division. For example, creating a sales order creates an obligation for the legal entity that reserves the order to deliver the goods on the confirmed date and an obligation for the buyer to receive and pay for those goods. Under contract law, in most countries compensation can be sought both for actual losses, which place the injured party in the same condition as if it had not entered into the contract, and for loss of business or profit that would have been realized in a transaction. The legal entity and its relationship to business units You can upload only one configuration. When you load a configuration, the application creates the departments, legal entities, business units, and so on. After you load the configuration, you use individual tasks to edit, add, and delete business structures. InFusion Corporation uses the Enterprise Structures Configurator to configure its corporate structure. They identified two departments, one for lighting and the other for security. They operate in four countries: the United States, the United Kingdom, Japan and India, and they have created a legal entity for each of the countries. The sales and marketing functions are located in India and Japan, while the US and UK only have the sales function. When setting up your business structure in Oracle Fusion Applications, you should understand that the contracting party is always the legal entity in each transaction. Individual legal entities own the assets of the business, record sales and pay taxes on those sales, make purchases and incur expenses and make other transactions.

For example, your company is active in the hospitality industry. You add a new business unit to keep up with your new spa services. The hotel service reference record can be assigned to the new business unit to quickly configure data for that entity component. If necessary, you can define additional reference data for business units in a reference data set specific to each division. Each company has three basic structures, legal, administrative and functional, which are used to describe its activities and form a basis for reporting. In Oracle Fusion, these structures are implemented through the chart of accounts and organization. While many alternate hierarchies can be implemented and used for reporting, you probably have a basic structure that organizes your organization into departments, business units, and departments aligned with your strategic goals. For example, the Internal Revenue Service is the agency responsible for enforcing tax laws in the United States. In some countries, such as India and Brazil, you must print the information provided by the judicial authorities in your tax returns. If your legal entity has employees, optionally select the Legal employer check box.

A division may be a combination of legal entities or part of one or more legal entities. To represent these departments, if necessary, create an administrative unit in Fusion Financials. Multiple legal entities can be attached to a GL ledger in Fusion. The order of journal document numbers is maintained at the general ledger level. Therefore, if your client`s jurisdiction requires a unique GL document sequence number for each legal entity, you must have an unambiguous relationship between the Fusion GL ledger and your legal entity. This example shows a simple configuration that does not include tax return units. The legal units of the employer and payroll are the same and share the same limits. Reports can only be done at one level. Countries such as Saudi Arabia and the United Arab Emirates (UAE) can use this type of model, as reporting in these countries is done at the legal entity level. This transaction is binding on your standard legal entities associated with each business entity.

Oracle Fusion Procurement, Oracle Fusion Projects, and Oracle Fusion Supply Chain applications are based on information derived from the business entity`s legal entity. Oracle Fusion applications help you model your legal entities. If you buy or sell to other legal entities, define those other legal entities in your customer and supplier registries. Legal persons have the right to own property, the right to act, the responsibility to repay debts and the responsibility to answer to supervisory authorities, tax authorities and owners in accordance with the rules established in the relevant legislation. Their rights and obligations can be enforced through the judicial system. Define a legal entity for each registered company or other legally recognized legal entity for which you intend to record assets, liabilities, and income, pay transaction taxes, or engage in intra-group transactions. Tax jurisdictions and tax jurisdictions do not represent the same jurisdiction. Although in some countries the two jurisdictions are defined at the same geopolitical level, e.g. one country, and have the same legal authority, they are two different jurisdictions. Define an organization`s business units to enable flexible implementation, provide consistent unity for transaction control and reporting, and be an anchor for sharing reference records across applications.

Between Legal and Business Organizations is a functional organization structured around people and their skills. For example, sales, manufacturing, and service teams are functional organizations. This functional structure is represented by the functional axis of the figure above. They reflect the efforts and expenses of your functional organizations directly in the income statement. Organizations must manage and report revenues, cost of sales, and functional expenses such as research and development (R&D) and selling, general and administrative (SG&A) expenses. In Oracle Fusion Applications, the functional structure is implemented using departments and organizations, including sales, marketing, project, cost, and inventory organizations. Although transactions that cross balancing segments do not necessarily cross the boundaries of legal entities, all transactions that cross the boundaries of legal entities must cross balancing segments. If you are making an acquisition or preparing to sell part of your business, you may want to balance that part of the business into its own balance sheet segment, even if the part is not a separate legal entity. If you don`t assign legal entities that share the same ledger to reconciliation segments, you can`t use the intercompany functionality to distinguish them or track individual equity. The legal entity is an organizational unit registered with legal government authorities, also known as a jurisdiction. Jurisdiction generally describes any authority in a particular territory.

Therefore, any company operating in this area should be registered as a legal entity in that jurisdiction.