--- title: How to Create and Use a Legal Entity description: A Legal Entity is any company or organization with legal rights and responsibilities, including tax liability. A legal entity can enter into contracts (e.g., as a vendor or a supplier) and assumes leg --- [Skip to content](https://help.precoro.com/how-to-create-a-legal-entity-and-use-it#main-content) [Contact us](https://help.precoro.com/kb-tickets/new?hsLang=en) [Customer portal](https://help.precoro.com/tickets-view?hsLang=en) [![Property 1=Default](https://help.precoro.com/hubfs/Property%201=Default.svg)](https://app.precoro.com/login) Open main navigation Close main navigation - [Contact us](https://help.precoro.com/kb-tickets/new) - [Customer portal](https://help.precoro.com/tickets-view) - [Contact Us](https://share.hsforms.com/1-5JilMA_Qv6AOSVjFtNhDg14slf) [Contact Us](https://share.hsforms.com/1-5JilMA_Qv6AOSVjFtNhDg14slf) Hi there! 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[Configurations](https://help.precoro.com/precoro-setup?hsLang=en#configurations) # How to Create and Use a Legal Entity ## Learn how to create and manage Legal Entities in Precoro. #### TABLE OF CONTENTS - [How to Set and Create a Legal Entity](https://help.precoro.com/how-to-create-a-legal-entity-and-use-it#How1) - [How to Set a Unique Legal Entity Code as Part of Custom Numbering](https://help.precoro.com/how-to-create-a-legal-entity-and-use-it#Unique-Legal-Entity-Code) - [How to Use Legal Entities in Purchase Orders](https://help.precoro.com/how-to-create-a-legal-entity-and-use-it#How2) - [How to Set Up Dependencies between Legal Entities and Taxes](https://help.precoro.com/how-to-create-a-legal-entity-and-use-it#taxes) A **Legal Entity** is a company or organization with its own legal rights and responsibilities, including tax obligations. It can enter contracts (e.g., as a vendor or supplier) and carries legal liability for its activities. In Precoro, you can work with one or multiple legal entities. When creating orders or expenses, select the relevant entity and analyze the data accordingly. **💡 Please note:** All legal entities in Precoro use the same processes and approval flows. ### How to Create a Legal Entity To create a **Legal Entity**, follow these steps: 1\. In the **Configuration** module → **Basic Settings** → **Documents Setup → General Settings** tab, find the **Legal Entities** field and activate it → **Save**. ![](https://help.precoro.com/hubfs/Monosnap%20screencast%202023-07-10%2013-26-43-gif.gif) 2\. Go back to the **Configuration** page and open the **Legal Entities** section. [![](https://help.precoro.com/hs-fs/hubfs/Screenshot%202022-12-20%20at%2010.41.25%20AM.png?width=670&height=325&name=Screenshot%202022-12-20%20at%2010.41.25%20AM.png)](https://help.precoro.com/hs-fs/hubfs/Screenshot%202022-12-20%20at%2010.41.25%20AM.png?width=1376&height=668&name=Screenshot%202022-12-20%20at%2010.41.25%20AM.png&hsLang=en) 3\. Click the **Add Legal Entity** button. [![Add Legal Entity](https://help.precoro.com/hs-fs/hubfs/Add%20Legal%20Entity.jpg?width=670&height=197&name=Add%20Legal%20Entity.jpg)](https://help.precoro.com/hubfs/Add%20Legal%20Entity.jpg?hsLang=en) 4\.  Enter the entity name (this field is obligatory) and all the relevant information. Optionally, add a logo to use in print PDF and XLSX versions of documents. This logo also will be added to the emails Precoro sends to your suppliers, for example, when you create a new purchase order. Please ensure the image is in JPG or PNG format, 1:1 aspect ratio (square), and up to 25 MB. [![LE Logo](https://help.precoro.com/hs-fs/hubfs/LE%20Logo.png?width=670&height=314&name=LE%20Logo.png)](https://help.precoro.com/hubfs/LE%20Logo.png?hsLang=en) If you have [Multi-Entity Management](https://help.precoro.com/multi-entity-management?hsLang=en) enabled in your company, you can also select a currency for the legal entity. The following restrictions apply: - You can only select one currency per LE. - Only the currencies available on the company level can be selected for LEs. - Once saved, the LE's currency can't be changed. Once currencies for LEs are established, document totals will be displayed accordingly. Custom document reports also have an option to display totals in LE currency. You'll see a **Show** checkbox for fields in this form. Enable it for the fields you'd like to display in purchase orders and invoices.  [![Show checkbox](https://help.precoro.com/hs-fs/hubfs/Show%20checkbox.jpg?width=670&height=220&name=Show%20checkbox.jpg)](https://help.precoro.com/hubfs/Show%20checkbox.jpg?hsLang=en)Press the **Create** button in the top right once done. If you later need to disable a legal entity: 1. Find it in the list of legal entities and press Edit (pencil icon). 2. Switch the Active toggle to **OFF**. 3. Press **Update**. You can find the disabled Legal Entity using the filter **Active** → **No**. ### How to Set a Unique Legal Entity Code as Part of Custom Numbering In the Legal Entity section, you can see the **Unique Code** field where you can input digits and characters to create your code and further display it as part of the Custom Numbering in the selected document. **💡 Please note:** To set up the Unique Code from Legal Entity to be part of the document Custom Numbering, please contact our Support Team, who will set it up for you. Also, you can use filters to search your entities by the **Unique Code**: [![](https://help.precoro.com/hs-fs/hubfs/Monosnap%20Company%20Legal%20Entities%202024-07-30%2012-03-28-png.png?width=670&height=323&name=Monosnap%20Company%20Legal%20Entities%202024-07-30%2012-03-28-png.png)](https://help.precoro.com/hubfs/Monosnap%20Company%20Legal%20Entities%202024-07-30%2012-03-28-png.png?hsLang=en) ### How to Use Legal Entities in Purchase Orders When you create the Purchase Order, you can select the Legal Entity for which you want to order the items. [![](https://help.precoro.com/hs-fs/hubfs/Screenshot%202022-12-20%20at%2010.49.07%20AM.png?width=670&height=326&name=Screenshot%202022-12-20%20at%2010.49.07%20AM.png)](https://help.precoro.com/hs-fs/hubfs/Screenshot%202022-12-20%20at%2010.49.07%20AM.png?width=1376&height=670&name=Screenshot%202022-12-20%20at%2010.49.07%20AM.png&hsLang=en) In the PO document this information will be displayed in the following way: [![](https://help.precoro.com/hs-fs/hubfs/Screenshot%202022-12-20%20at%2010.50.38%20AM.png?width=670&height=326&name=Screenshot%202022-12-20%20at%2010.50.38%20AM.png)](https://help.precoro.com/hs-fs/hubfs/Screenshot%202022-12-20%20at%2010.50.38%20AM.png?width=1376&height=670&name=Screenshot%202022-12-20%20at%2010.50.38%20AM.png&hsLang=en) When you open the PDF version of the PO, you can find your Legal Entity’s detailed info in the **Bill to** section. This information will be visible to your suppliers when they receive your purchase order and can also be used for invoicing. [![](https://help.precoro.com/hubfs/Knowledge%20Base%20Import/s3.amazonaws.comcdn.freshdesk.comdatahelpdeskattachmentsproduction35150393350originalYeFkGiMGLgMzSFPdpE5TF3C8xh45-EVg8g.png)](https://help.precoro.com/hubfs/Knowledge%20Base%20Import/s3.amazonaws.comcdn.freshdesk.comdatahelpdeskattachmentsproduction35150393350originalYeFkGiMGLgMzSFPdpE5TF3C8xh45-EVg8g.png?hsLang=en) Additionally, you can filter your POs and Invoices by Legal Entities using the Purchase Order/Invoice module filters. [![](https://help.precoro.com/hs-fs/hubfs/Screenshot%202022-12-20%20at%2010.52.03%20AM.png?width=670&height=326&name=Screenshot%202022-12-20%20at%2010.52.03%20AM.png)](https://help.precoro.com/hs-fs/hubfs/Screenshot%202022-12-20%20at%2010.52.03%20AM.png?width=1376&height=670&name=Screenshot%202022-12-20%20at%2010.52.03%20AM.png&hsLang=en) The information on the Legal Entity is exported in the **Reports** so that you can have the analytics on this field. [![](https://help.precoro.com/hs-fs/hubfs/Screenshot%202022-12-20%20at%2010.53.04%20AM.png?width=670&height=325&name=Screenshot%202022-12-20%20at%2010.53.04%20AM.png)](https://help.precoro.com/hs-fs/hubfs/Screenshot%202022-12-20%20at%2010.53.04%20AM.png?width=1376&height=668&name=Screenshot%202022-12-20%20at%2010.53.04%20AM.png&hsLang=en) After downloading, you will see the Legal Entity filed in the file:  [![](https://help.precoro.com/hubfs/Knowledge%20Base%20Import/s3.amazonaws.comcdn.freshdesk.comdatahelpdeskattachmentsproduction35150393914originalNCkCe5lVLNB8rUpZb_yZV3tLSvxyXICJCA.png)](https://help.precoro.com/hubfs/Knowledge%20Base%20Import/s3.amazonaws.comcdn.freshdesk.comdatahelpdeskattachmentsproduction35150393914originalNCkCe5lVLNB8rUpZb_yZV3tLSvxyXICJCA.png?hsLang=en) ### How to Set Up Dependencies between Legal Entities and Taxes You can establish dependencies between legal entities and taxes. Creating these dependencies will help manage taxes in companies that operate in multiple countries with different sets of tax rates. To use this functionality: - Create the dependencies for every tax limited to certain legal entities. When a legal entity is selected in a document, only the taxes assigned to it can be added. - If there is a tax without dependencies, it can be added to documents regardless of the legal entity. 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