4 Replies Latest reply: Mar 23, 2009 8:58 AM by Srini Chavali-Oracle RSS

    What is a Legal Entity and Operating Unit??

      Could someone let me know what exactly is a Legal Entity and Operating Unit. The definition or explanation in the documentation is not satisfactory or clear. What are the differences between the above.

      And where in the per_all_assignments_f table is the Legal entity stored. I know that the Legal entity is stored in the Statutory information in the assignments screen. Also can someone let me how based on the company code in the organization the legal entity is linked. Where in the tables is this link maintained?

      Could someone let me know the above.

        • 1. Re: What is a Legal Entity and Operating Unit??
          Dear Shekar

          what exactly is a Legal Entity and Operating Unit?
          ANS: According the Book or user guide definitions says:

          GRE/Legal Entity: Use this classification to represent the following organizations:

          Ultimate Legal Entity: this represents the enterprise, and typically, the enterprise is the highest (global) level of a business organization.

          Legal Entity: this represents the designated legal employer for all employment-related activities. The legal authorities in a country recognize this organization as a separate employer. In an organization hierarchy, a legal entity may report to an operating company or to the ultimate legal entity.

          Consolidated Legal Entity: this organization acts on behalf of multiple operating companies that are not legally registered, or simply on behalf of the enterprise in a country.

          See Shekar the Legal Entity is taken under Classification is we know that the organization is going to show the Taxation to the Government. where as if u take typical UAE countruies here every store is an LLC and they submit the taxing for every store or shop.

          Where as Operating Unit is generally used for the different lines of business which are under that Business GRoup

          Say for an Example:

          ABC is the Company name and that has its root in UAE, Qatar and Oman

          then it is like ABC Business Group > UAE Legal Entity > REtail/Property/Furniture etc are the Operating Units.

          Hope this information is helpful and clear to you or else let me know if you have any concerns.

          Coming to the Company Code we use the code for the Inventory Organizations so that the clients will not get confused with the existing code and the system code so generally we use the same codes for it.
          • 2. Re: What is a Legal Entity and Operating Unit??
            Hi Srujana,
            thanks for the information. The answers have confused me further. Could you please give me the document which clearly explains what the different classifcations are. I have numerous questions related to the legal entities and opearating units.

            Could you suggest a good book which can answer these questions

            • 3. Re: What is a Legal Entity and Operating Unit??
              Hi shekar

              I apologize for the confusion where as please go through the classifications in the Help window and also please go through the below link.


              Hope this would help. Mean while any thing more please let me know

              • 4. Re: What is a Legal Entity and Operating Unit??
                Srini Chavali-Oracle
                Pl also see if ML Doc 268244.1 (Oracle Inventory Organizations - FAQ) helps