Verifying Company Registration
It is important to know if a company or organization has been legally registered. You can find this on the business registration certificate, allowing you to know their legal entity type.
Steps to Confirm Legal Entity
To protect yourself before engaging a new business, follow these steps:
- Check if the company is on the Financial Conduct Authority register.
- Call the secretary of state’s office or visit their website to confirm LLC status.
- Use the state business filing agency’s online entity name check tool to see if another business is using the name.
Legal Entity Identifiers
A legal entity identifier (LEI) is a 20-digit code assigned to legal entities in financial transactions, serving as global references for legal entities.
A legal entity can enter contracts, borrow and pay debts, file and be named in lawsuits, and be held accountable for litigation results. Almost all well-known businesses are corporations with legal independence from shareholders. Incorporating your small business allows you to control income timing, a tax advantage.
Going into business requires understanding trade, local, state, and federal laws. There are reasons for small business owner-managers to evaluate legal structures to best meet their needs, like changing laws and capital needs. This information will help determine the best structure for you.
To qualify as a small business, a company must fall within the size standards for its industry. Call the IRS to see if your company is a C or S corporation based on income tax returns filed. An LLC must choose to pay taxes as an S Corp, C Corp, Partnership or Sole Proprietorship.
According to ISO standards, only legal entities eligible for an LEI can enter contracts independently and are financially/legally responsible for transactions. The term "business entity" refers to an organization’s legal structure and how it operates. We’ll explore structures and how to choose the right one for your organization.