What is a legal entity?

Legal Entity

A legal entity is an association, corporation, partnership, proprietorship, trust, or individual that has the legal capacity to enter into agreements or contracts, assume obligations, incur and pay debts, sue and be sued in its own right, and to be held responsible for its actions. The legal entity will contain legal name and tax identification number information.

Legal Entity vs Merchant
A merchant refers to the actual business that this legal entity owns. This may contain 'doing business as' or DBA information.

For most small or medium sized businesses there may not be much of a distinction between the legal entity and the merchant. The distinction could be a situation such as when there is a legal entity that operates several different businesses that in this case would be referred to as merchants. Nevertheless both the legal entity and merchant information needs to be provided for verification purposes.

Primary Owner
The "personalContact", "personalAddress", "personalTaxId", and "stakePercent" directly on the legal entity should be that of the primary owner. In a large or public company, the primary owner is a person with fiduciary responsibility for the company's finances. If only one owner is submitted, they are considered to own 100% stake. It is the responsibility of the platform to ensure the stake ownership information is accurate as required by law.

Additional Owners
Anyone else with a minimum of 25% ownership of the legal entity must be included under "additionalOwners".

Total ownership across the primary owner and any additional owners can not exceed 100%.

Additional Information

Entity Type
Some requirements for the legal entity will change depending on what type of entity you are.

ISP - Individual Sole Proprietorship
If the entityType is ISP, then the "personalTaxId" parameter should also be sent.
The stakePercent parameter should be "100", and no additional owners will be allowed.

LLC - Limited Liability Company
If the entityType is LLC, then the "businessTaxId" parameter should also be sent.

CORP - Corporation
If the entityType is CORP, then the "businessTaxId" parameter should also be sent.

Personal Tax Id
You may send us the last4PersonalTaxId if you don't have the full personalTaxId. We will attempt to underwrite the customer but we may respond back that the full personalTaxId is required. If you provide us a full personalTaxId, we will automatically replace the last4PersonalTaxId with the last four of the full personalTaxId that was provided.

Documentation

Request

Parameter	Specification
entityType	Type: String ["LLC", "ISP", "CORP"]
businessName	Type: String Length: 1-256 This name is strictly for legal verification purposes. Under certain conditions this may be the same as merchant name.
businessTaxId	Type: String Length: 9-10 The tax id belonging to the business.
businessSalesVolume	Type: String Length: 0-32 The annual sales volume.
businessAcceptedCards	Type: Boolean Whether or not the business accepted card payments in the past or is currently accepting card payments.
yearsInBusiness	Type: Integer String The number of years this business has been operating.
personalTaxId	Type: String Length 9-10 The tax id for the owner of the business.
last4PersonalTaxId	Type: String Length 4 The last 4 digits of the tax id for the owner of the business.
businessAddress	Type: JSON Object Address The address of the legal entity.
personalAddress	Type: JSON Object Address The address of the primary contact for the legal entity.
personalContact	Type: JSON Object Contact The details of the primary contact for the legal entity.
stakePercent	Type Integer String Length 2-3 The primary owner's stake in the entity.
additionalOwners	Type: Array AdditionalOwner Any additional owners of the entity.

Response

All of the request parameters, except for businessTaxId and personalTaxId, will be returned in the response. In addition, the following parameters will also be returned in the response.

Parameter	Description
last4BusinessTaxId	The last 4 digits of the businessTaxId.

Example

Legal entity request

{
  "legalEntity": {
    "entityType": "LLC",
    "businessName": "ACME Corporation",
    "businessTaxId": "817261728",
    "businessSalesVolume": "50000",
    "businessAcceptedCards": true,
    "yearsInBusiness": "7",
    "personalTaxId": "271827416",
    "businessAddress": {..},
    "personalAddress": {..},
    "personalContact": {..},
    "stakePercent": "75",
    "additionalOwners": [
      {..}
    ]
  }
}

Legal entity response

{
	"account": {
    "legalEntity": {
      "entityType": "LLC",
    	"businessName": "ACME Corporation",
    	"last4BusinessTaxId": "1728",
   	  "businessSalesVolume": "50000",
  	  "businessAcceptedCards": true,
      "yearsInBusiness": "7",
    	"last4PersonalTaxId": "7416",
    	"businessAddress": {..},
      "personalAddress": {..},
    	"personalContact": {..},
      "stakePercent": "75",
      "additionalOwners": [
        {..}
      ]
    }
  }
}