What is a Legal Entity?

A legal entity is an organization recognized by law when it meets the conditions prescribed by law. There are two types of legal entities: commercial legal entities and non-commercial legal entities.

The conditions for legal recognition as a legal entity are stipulated in Article 74 of the Civil Code 2015 and include:

- Being established in accordance with the provisions of this Code and other relevant laws;- Having a legal entity structure as prescribed. (A legal entity must have a management body; The organization, duties, and powers of the management body of the legal entity are prescribed in the charter of the legal entity or in the establishment decision of the legal entity; A legal entity may have other bodies as decided by the legal entity or by law.)- Possessing assets independent of individuals and other legal entities and being responsible for its liabilities with its own assets;- Independently participating in legal relations in its own name.

Every individual and legal entity has the right to establish a legal entity, except in cases otherwise provided by law.

What is a commercial legal entity?

A commercial legal entity is a legal entity whose main objective is to seek profit, and the profit is distributed to its members.

Commercial legal entities include enterprises and other economic organizations.

What is a non-commercial legal entity?

A non-commercial legal entity is a legal entity whose main objective is not to seek profit; if it has profits, they are not distributed to its members.

Non-commercial legal entities include state agencies, people's armed units, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations, social funds, charitable funds, social enterprises, and other non-commercial organizations.

Related documents:

Civil Code 2015

Enterprise Law 2014

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