Understanding the Concept of Legal Entity

How a company structures its long term operations in his own country and for expansion to foreign countries, effectively defines how it will be taxed hence the choice could have a significantly potential effect on the profitability. Regulations prevalent in most of the countries generally allow foreign entities to choose classification as a corporation (subsidiary), partnership, unincorporated branches; Limited Liability Companies (LLCs), distributor and manufacturer representatives and joint ventures. Each choice has its own implications and complications. Generally corporates operate as a separate legal entity with limited liability. Watch this video to understand the concept of legal entities and why it is so important for all functions including finance and operations.