Legal Entity Concept in Oracle R12

The above figure revise the Oracle Architecture Hierarchy. From this figure we can clearly see that after creation of Business Group next step is to create a Legal Entity. Creating Legal Entity and assigning a Ledger to it is just a matter of following steps:     Step 1 – Set Up Country Geography Hierarchy in TCA
Step 2 – Create a Legal Entity
Step 3 – Validate Legal Entity, Establishment and Registration
Step 4 – Set up a Ledger for the new Legal Entity
Step 5 – Set Up an Operating Unit
Step 6 – Associate the Operating Unit with the Legal Establishment
Step 7 – Run Replicate Seed Data
These steps will be explained in upcoming posts in specific module. The real purpose of this post is to get an understanding about the concept of Legal Entity.

Legal Entity represents a legal company for which Fiscal and Tax reports are prepared. A Legal Entity can Model to an Enterprise, a Designated Legal unit which is recognized by legal authorities in a country. Legal entity is a business entity that is known to exist to the outside world. Internal organizations or divisions are not legal entities themselves, but are just part of it. In the Multi Organization structure various legal entities could share the same ledger. Both legal entities and operating units are associated with the ledger and the relationship between the legal entity and operating unit is derived based on the ledger.
A legal Entity can be associated to Single Ledger, Multiple Legal Entities can be Associated to a Ledger.
The Legal Entity Configurator allows you to define legal entities and establishments in the Oracle system to achieve legal compliance for business activities handled by the Oracle E-Business Suite.
Navigation path: Legal Entity Manager>Legal Entity Configurator

The next post after this is the complete configuration steps of Oracle General Ledger including the Determinants for Chart Of Accounts.

Please contact me for any kind of detail related to the understanding of Legal Entity at:
Email: raheelirshadkhan@gmail; Facebook: Raheel Irshad Khan orraheel.i.khan.14@facebook.com
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Phone: +92-302-4381795
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