A legal entity is an entity that has legal personality, giving it legal rights and obligations including allowing it to enter into contracts, own property, and to sue and be sued. A legal entity may be created in order to engage in business activities, charitable work, or other activities. Most often, legal entities in business are formed to sell a product or a service. There are many types of legal entities defined in the legal systems of various countries. These may include corporations, cooperatives, charities, partnerships, sole traders and limited liability companies, although not all of these may be legal entities in all jurisdictions. The specific rules vary by country and by state or province. Some of these types are listed below, by country.
Common-law jurisdictions
United Kingdom
There are a number of forms of legal entity in the United Kingdom, including some types of business partnership, companies incorporated under the Companies Acts, mutual societies, some types of charitable organisation, and others including chartered corporations and statutory corporations.
Partnerships (other forms of partnership exist that are not legal entities): General partnership (in Scotland) Limited liability partnership (LLP) Scottish limited partnership (SLP)
Companies – corporations incorporated under the Companies Act 2006 (or previous companies acts): Private limited company (Ltd or Limited; or ) Private company limited by shares. The liability is limited to the amount, if any, unpaid on the shares held by them. Its shares cannot be traded publicly. Private company limited by guarantee. The liability is limited to such amount as the members undertake to contribute to the assets of the company in the event of its being wound up. Private unlimited company (Welsh: ). A company with no limit on the liability of its members. Public limited company (PLC; Welsh: or ). A limited company whose shares may be traded publicly. Community interest company (CIC) – a company that carries out activities for the benefit of the community. These may be either a company limited by guarantee or a company limited by shares. UK Societas (UKS) – the form taken by a UK-registered Societas Europaea (European public limited company) from 1 January 2021 following Brexit. Treated in most respects like a public limited company.
Mutual societies: Co-operative or community benefit society – these may be co-operatives run for the benefit of members, community benefit societies run for the benefit of the community, or charitable community benefit societies run for the public benefit. Pre-commencement societies (formerly known as an industrial and provident society) were registered with the Financial Conduct Authority before 1 August 2014 (6 April 2018 for Northern Ireland). Credit union - a financial co-operative. Building society Friendly society
Charities: Charitable company – a type of company limited by guarantee. Charities incorporated in this form may apply for exemption from the requirement to include "Ltd" (or one of the other forms) in their company name. Very rarely, a company limited by shares where the shareholders have no right to receive dividends may be registered as a charity; for example, St John's College, Durham, where the council members are the shareholders, and Harvard Global Research, a UK company limited by shares where the sole shareholder is Harvard Global Research and Support Services Inc., a US-based charity. Charitable incorporated organisation (CIO) – registered with the Charity Commission for England and Wales. Scottish charitable incorporated organisation (SCIO) – registered with the Office of the Scottish Charity Regulator.
Other forms: Corporation by prescription - a corporation that has existed since time immemorial: the University of Oxford, the University of Cambridge and the City of London Corporation. Chartered corporation – an organisation incorporated by royal charter. These are normally bodies operating in the public interest, e.g., charities or professional bodies, but also including many older universities and, historically, chartered companies. Statutory corporation – a corporation created by statute and having only those powers granted by that statute.
Classifications: Corporation sole – a corporation consisting of a single person, normally an incorporated official position such as the Archbishop of Canterbury or the Clerk of the House of Commons. A corporation made up of more than one person (i.e., all other corporations) is a corporation aggregate. Ecclesiastical corporation – a Church of England corporation (aggregate or sole) established for spiritual purposes. All other corporations are lay corporations. Eleemosynary corporation – a lay corporation established by a financial endowment "for the perpetual distribution of the free alms or bounty of the founder". All other lay corporations, including other charities, are civil corporations.
Australia Australian companies are generally either proprietary or public. Under the Corporations Act 2001, proprietary companies commonly use the suffix Pty Ltd. LLP (Limited liability partnership): partnerships are governed on a state-by-state basis in Australia. In Queensland, a limited liability partnership is composed of at least one general partner and one limited partner. It is thus similar to what is called a limited partnership in many countries. ILP (Incorporated limited partnership): used for venture capital investments comes in four types: Venture Capital Limited Partnership (VCLP), Early-stage Venture Capital Limited Partnership (ESCVLP), Australian Venture Capital Fund of Funds (AFOF), Venture Capital Management Partnership (VCMP).
Inc. (Incorporated): restricted to non-profit associations Ltd. (Limited): ≈ plc (UK). The suffix Ltd. may also be used by a private company limited by guarantee, such as a charity or university (these may obtain dispensation from the Registrar of Companies to operate without the suffix). NL (No liability): A type of mining, speculative, or research company with no right to call up the unpaid issue price of shares. Pty. Ltd. (Proprietary Limited Company): ≈ Ltd. (UK) ATF Trust. In Australia companies can act as a trustee for a trust. Pty. (Unlimited Proprietary) company with a share capital: A company, similar to its limited company (Ltd., or Pty. Ltd.) counterpart, but where the liability of the members or shareholders is not limited. Trust Indigenous Corporation under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 ("CATSI Act"), administrated by the Office of the Registrar of Indigenous Corporations
Canada Companies in Canada can be incorporated at the federal or provincial level under the Canada Business Corporations Act or equivalent provincial statutes.
The word or expression "Limited", Limitée, "Incorporated", Incorporée, "Corporation" or Société par actions de régime fédéral or the corresponding abbreviation "Ltd.", Ltée, "Inc.", "Corp." or S.A.R.F. forms part of the name of every entity incorporated under the Canada Business Corporations Act (R.S., 1985, c. C-44). ≈ Ltd. or Plc (UK)
As an exception, entities registered prior to 1985 may continue to be designated Société commerciale canadienne or by the abbreviation S.C.C.
Under the Canada Cooperatives Act (1998, c. 1), a co-operative must have the word "cooperative", "co-operative", "coop", "co-op", coopérative, "united" or "pool", or another grammatical form of any of those words, as part of its name.
Unlike in many other Western countries, Canadian businesses generally only have one form of incorporation available. Unlimited liability corporations can be formed in Alberta "AULC", British Columbia "BCULC" and Nova Scotia "NSULC". The aforementioned unlimited liability corporations are generally not used as operating business structures, but are instead used to create favorable tax positions for either Americans investing in Canada or vice versa. For U.S. tax purposes the ULC is classified as a disregarded entity.
Rather, Canadian businesses are generally formed under one of the following structures: SP (Sole Proprietorship): No formal business structure is established GP (General Partnership): Either a formal structure with a partnership agreement, or an informal structure, in which case the Partnerships Act for the province will apply LP (Limited Partnership): An investment structure, limiting both the liability and the participation of the investor. An investor who takes an active role will be deemed a general partner, and become exposed to unlimited liability. Corporation Joint Venture: A business activity shared by two or more business entities. The joint venture's activities must be finite in terms of either time or scope.
Hong Kong Ltd (Limited/有限公司): may denote either a private or public company limited by shares, or a company limited by guarantee. Under the Companies Ordinance, the name of a Hong Kong incorporated company may be registered in English, Chinese, or both. Unltd or Ultd (Unlimited/無限公司): similar to a limited liability company (Ltd) but whose members or shareholders do not benefit from limited liability should the company ever go into formal liquidation. It is not a requirement under company law to add or state the word or designation Unlimited (無限公司) or its abbreviations (Unltd or Ultd) at the ending of its legal company name, and most unlimited companies do not.
India
In India, the Companies Act 2013 provides for public and private companies and introduced the one person company as a single-member private company; naming conventions include "Limited" for public companies and "Private Limited". Sole proprietorship – a sole proprietorship firm is the simplest form of business entity in India. It is owned and managed by a single person. It is usually considered to be the easiest way of registering and starting a business. It is not governed by any law and hence it is the easiest form of business in India. All the decisions and management of the business are in the hands of one person. Documents required for the registration of a sole proprietorship in India are Aadhar card, PAN card, bank account and a proof of registered office. Hindu Undivided Family (HUF) - a type entity consisting of members of a joint Hindu family. HUF represent a joint family that is held togrther by strong ties of kinship and estails a variety of joint property relations among the members.Chirashree Das Gupta and Mohit Gupta, “The Hindu Undivided Family in Independent India’s Corporate Governance and Tax Regime”, South Asia Multidisciplinary Academic Journal [Online], 15 | 2017, Online since 22 March 2017, connection on 05 June 2026. URL: http://journals.openedition.org/samaj/4300; DOI: https://doi.org/10.4000/samaj.4300 The Karta is the head of the family business, who generally is the eldest person in the house. HUF exists both as a family and as a firm. Partnership – liability is joint and unlimited. Registration is not compulsory and can be done through the registrar of firms. Active partners take part in day-to-day operations of the business, in addition to investing in it. Active partners are entitled to a share of the enterprise's profits. Sleeping partners invest in the business and are entitled to a share of its profits but do not participate in day-to-day operations. Limited liability partnership – liability is limited and similar to a partnership except that registration is mandatory and liability is limited. At least two partners are 'designated partners' (equivalent to directors in a company), who manage day-to-day working. Regulated by the union government. Companies under the Companies Act 2013 include: Private limited company – a company with 2–200 shareholders; shares are held privately and cannot be offered to the public. Have limited liability and registration is mandatory. Regulated by the union government.