What does legal person mean?

A legal person in finance refers to an entity that has rights, responsibilities, and legal standing under the law, such as a corporation, partnership, or other organization that is recognized as a distinct and separate entity from its owners or members. This means that the legal person can enter into contracts, sue and be sued, own property, and engage in financial transactions in its own name. In the context of finance, legal persons are important because they can borrow and lend money, invest in securities, and engage in other financial activities. They are also subject to legal and regulatory requirements, such as financial reporting and disclosure obligations, and can be held liable for their actions and obligations. Understanding the concept of legal persons is essential for financial professionals and investors, as it influences the way business transactions are conducted and how legal and financial risks are managed.