Legal entity

A legal entity, such as a company or organization, that has the capacity to enter into agreements or contracts and be held accountable for its obligations in a court of law, is known as a “personne morale” in French.

Legal entities are distinct from individuals, who are human beings with certain rights and responsibilities. As a legal entity, an organization can engage in economic transactions, own assets, borrow money, incur debts, sue and be sued in court. This concept allows organizations to carry out activities, through their executives, that would not be possible if they were composed solely of individuals. A legal entity can also be used to distribute responsibility among the members of an organization. While they are often incorporated companies, it is not necessarily.