A legal entity is an organization or individual that has legal rights and responsibilities. This means it can enter into contracts, sue or be sued, and own property. Common types of legal entities include corporations, limited liability companies (LLCs), and partnerships. Each type has its own legal structure and implications for liability and taxation. Legal entities are essential for conducting business and managing risks. For example, a corporation protects its owners from personal liability for the company's debts. This separation helps ensure that personal assets are not at risk if the business faces legal issues or financial difficulties.