Jobs Mail Id

Global HR Implementation
Define Legal Entities for HCM

CONTENTS
Define Legal Entities for HCM .........................................................1
Lesson Objectives ...................................................................................... 1
Legal Entities Overview ............................................................................... 2
Legal Entity Role ........................................................................................ 3
Legal Entity Considerations.......................................................................... 4
Demonstration: Managing Legal Entity HCM Information ................................. 5
Legal Entity and its Relationship to Divisions.................................................. 7
Instructor Note: Activity Timing ................................................................... 8
Student Activity: Defining a New Legal Entity ................................................ 9
Activity 1 Introduction: Defining a New Legal Entity ..................................... 10
Activity: Defining a Legal Address ............................................................ 12
Activity: Defining a Legal Entity ............................................................... 14
Legal Entity and its Relationship to Worker Assignments and Legal Employer ... 16
Legal Entity and Payroll Reporting .............................................................. 17
Legal Entity and Legal Reporting Units ........................................................ 18
Legislative Data Groups Overview .............................................................. 19
Legal Reporting Units Overview .................................................................. 20
Legislative Data Groups ............................................................................ 21
Instructor Note: Legislative Data Groups ..................................................... 23
Instructor Note: Activity Timing ................................................................. 24
Student Activity: Defining a New Legal Entity .............................................. 25
Activity 2 Introduction: View Legislative Data Group Associated with Legal Entity26
Activity 2: View Legislative Data Group Associated with Legal Entity............. 27
Define Legal Entities for HCM Review Question 1 .......................................... 28
Define Legal Entities for HCM Review Question 2 .......................................... 29
Define Legal Entities for HCM All Questions and Answers ............................... 30
Lesson Highlights ..................................................................................... 31
i
0 Define Legal Entities for HCM
Define Legal Entities for HCM

Lesson Objectives
After completing this lesson, you should be able to:
 Define legal entities for HCM

 Define legislative data groups
Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 1

Legal Entities Overview

Define a legal entity for each registered company or other entity recognized in law for
which you want to record assets, liabilities, expenses and income, pay transaction
taxes, or perform intercompany trading.
A legal entity has a separate legal identity and therefore conducts aspects of your
business for the following reasons:
 Facilitating local compliance

 Complying with corporate taxation within local jurisdictions
 Preparing for acquisitions or disposals of parts of the enterprise
 Isolating one area of the business from risks in another area. For example, your
enterprise develops property and also leases properties. You could operate the
property development business as a separate legal entity to limit risk to your
leasing business.
2 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Legal Entity Role

Role of your Legal Entity
The contracting party on any transaction is always the legal entity.
Individual legal entities:
 Own the assets of the enterprise

 Record sales and pay taxes on those sales
 Make purchases and incur expenses
 Perform other transactions
Legal entities must comply with the regulations of jurisdictions in which they register. To
support local reporting require ments, legal reporting units are created and registered.
The following screenshot is the Legal Entity page for InFusion Corp USA1.

Legal Entity Considerations

Oracle Fusion Applications support the modeling of your legal entities. If you make
purchases from or sell to other legal entities, define these other legal entities in your
customer and supplier registers, which are part of the Oracle Fusion Trading
Community Architecture.
Legal entities can be identified as legal employers and therefore, are available for use in
Oracle Fusion Human Capital Management (HCM) applications.

Demonstration: Managing Legal Entity HCM

Information
Demonstration Background
Review the HCM information for your legal entity.
Demonstration Scope
Review key fields in the HCM information for the InFusion Corp USA1 legal entity.
Demonstration Steps
Sign in is hcm_impl or hcm_impl1.
Start Here
Setup and Maintenance work area
1. In the Search region, in the Name field, enter Manage Legal Entity HCM
Information.
2. Click the Search button.
3. In the Manage Legal Entity HCM Information task row, click Go to Task.
Location: Manage Legal Entity HCM Information page
4. In the Legal Entity Name field, enter US1 Legal Entity.
5. Click Search.
6. In the Search Results region, click on the name US1 Legal Entity.
Location: Legal Entity: US1 Legal Entity page
7. Use the Work Day Information section to define the standard working hours for
each worker assignment in the legal entity.
Note: You can also enter work day information at the enterprise,
department, and position level.
8. In the Legal Employer Information section, use the Salary Level field to select
the level at which salary can be specified, for example Assigment or employment

terms.
9. Use the Worker Number Generation field to specify whether the application
generates a number for each worker.
Note: By default, worker numbers are not used. If you enable worker numbers
for the enterprise, then only you can specify worker numbers for the legal
employer.
10. In the Allow Employment Terms Override at Assignment field, specify

whether to allow override or not.
11. Use the People Group Flexfield Structure field to select the flexfield that
enables you to record people group information and assign people to specific
groups such as unions or working groups.
12. Use the Employment Model field to select either a 2-tier or 3-tier model for the
legal entity.
13. Click Done.
You have demonstrated how to manage legal entity HCM information.

Legal Entity and its Relationship to Divisions
 The division is an area of management responsibility that can correspond to a

collection of legal entities.
 You can aggregate the results for divisions by legal entity or by combining parts
of other legal entities.
 Define date-effective hierarchies for the cost center or legal entity segment in the
chart of accounts to facilitate the aggregation and reporting by division.

Instructor Note: Activity Timing
Approximate Activity Timing: 20 minutes

.

Student Activity: Defining a New Legal Entity

Using your activity guide, do the activity specified in the title of this page.

Activity 1 Introduction: Defining a New Legal Entity

Background
InFusion Corporation has acquired a new financial services division. You must create a
new legal entity with a new legal address.
Requirements
 Use the bold text for the object names, replacing the XX with your initials, as
indicated by your instructor
 You must have access to Oracle Fusion Application InFusion database or

comparable training or test instance at your site, on which to complete this
practice.
Activity Scope
Create a legal address using the address line 1 information that corresponds to your
student number:
1. 1000 Broadway
2. 2000 Broadway
3. 3000 Broadway
4. 4000 Broadway
5. 5000 Broadway
6. 6000 Broadway
7. 7000 Broadway
8. 8000 Broadway
9. 9000 Broadway
10. 10000 Broadway
11. 11000 Broadway
12. 12000 Broadway

Note: When you enter the zip code, the application populates the city and state for
you.

Activity: Defining a Legal Address

In this activity, you create a legal address
Sign in as hcm_implX, replacing X with the number assigned to you by your instructor.
Start Here
Setup and Maintenance work area, Implementation Project: XX Workforce
Deployment page
These task lists are expanded: Workforce Deployment - Define Common

Applications Configuration for Human Capital Management - Define Enterprise
Structures for Human Capital Management - Define Legal Jurisdictions and
Authorities.
1. In the Manage Legal Addresses task row, click Go to Task.
Location: Manage Legal Addresses page
Information
To create a legal entity successfully, you must first set up a legal address in the
Manage Legal Addresses page. You can then select the legal address in the
Manage Legal Entity page.
2. On the Search Results section toolbar, click the Create icon button.
Location: Location Create dialog box
3. In the Address Line 1 field, enter Your.Assigned.Address.
4. In the Postal Code field, enter 30314 and press Tab.
5. Select the row containing Atalanta, Fulton, GA.
6. Click OK.
Location: Manage Legal Addresses page
7. Click Save and Close.
Location: Implementation Project: XX Workforce Deployment page
8. In the Manage Legal Addresses task row, click the Status icon button.

Location: Edit Status dialog box
9. In the Status field, select Completed.
In this activity, you learned how to create a legal address.

Activity: Defining a Legal Entity

In this activity, you create a legal entity.
Start Here
Deployment page

Structures for Human Capital Management - Define Legal Entities for Human
Capital Management.
1. In the Manage Legal Entity task row, Click Go to Task.
Location: Manage Legal Entities page
2. On the Search Results section toolbar, click the Create icon button.
Location: Create Legal Entity page
3. In the Name field, enter XX InFusion Financial.
4. In the Legal Entity Identifier field, enter 12-12321- XX
Information
Register your legal entity as a Payroll Statutory Unit (PSU) to pay and report
on payroll tax and insurance, and as a legal employer that employs people.
5. Select Payroll statutory unit.
6. Select Legal employer.
7. In the Registration Information section Legal Address field, select the legal
address that you created in the previous activity.
8. In the EIN or TIN field, enter 93654213X, replacing X with the number assigned
to you by your instructor.
9. In the Registration Number field, enter 1212321X, replacing X with the number
assigned to you by your instructor.

Location: Manage Legal Entities page
11. Click Done.
12. In the Manage Legal Entity task row, click the Status icon button.
Location: Edit Status dialog box
13. In the Status field, select Completed.
In this activity, you learned how to create a legal entity.

Legal Entity and its Relationship to Worker

Assignments and Legal Employer
 Legal entities that employ people are called legal employers in the Oracle Fusion
Legal Entity Configurator.
 You must enter legal employers on worker assignments in Oracle Fusion Human
Capital Management.

Legal Entity and Payroll Reporting
Your legal entities are required to pay payroll tax and social insurance such as social
security on your payroll.
You can register payroll statutory units (PSUs) to pay and report on payroll tax and
social insurance on behalf of many of your legal entities. For example, if you are a
multinational, multicompany enterprise, then you register a payroll statutory unit in each
country where you employ and pay people. You associate a legislative data group
(LDG) with a payroll statutory unit to provide the correct payroll information for workers.
As the legal employer, you might be required to pay payroll tax, not only at the national
level, but also at the local level.
 You meet this obligation by establishing your legal entity as a place of work
within the jurisdiction of a local authority.
 Set up legal reporting units to represent the part of your enterprise with a specific
legal reporting obligation.
 You can also mark these legal reporting units as tax reporting units, if the legal
entity must pay taxes as a result of establishing a place of business within the
jurisdiction.

Legal Entity and Legal Reporting Units
Create and register legal reporting units to support local reporting requirements. When
you first create a legal entity, the Oracle Fusion Legal Entity Configurator automatically
creates one legal reporting unit for that legal entity with a registration.

Legislative Data Groups Overview

Legislative data group:
 Is a country specific data partition within an enterprise.

 Supports the configuration of objects with a strong legislative context, such as
payroll, absence types, elements, rates of pay.
 Does not span enterprises

Legal Reporting Units Overview

A legal reporting unit is the lowest level component of a legal structure that requires
registrations. You use it to group workers for the purpose of tax and social insurance
reporting or represent a part of your enterprise with a specific statutory or tax reporting
obligation.
Define legal reporting units by:
Physical location, such as a sales office.
Logical unit, such as:
 Groups of employees subject to different reporting requirements.

 Human Capital Management (HCM) system where you use your legal reporting
units to model your tax reporting units. A tax reporting unit can be used to group
workers for the purpose of tax reporting.
Plan and define your legal reporting units at both the local and national levels if you
operate within the administrative boundaries of a jurisdiction that is more granular than
country.
For example:
 If the legal entity establishes operations requirements for each local area in a
country that requires reporting of employment and sales taxes locally as well as
nationally.
 If you need more than one legally registered location to meet this legal entity's
reporting requirements in each local area.
 Legal entities in Europe operate across national boundaries, and require you to
set up legal reporting units for the purposes of local registration in each country.

Legislative Data Groups

Legislative data groups are a means of partitioning payroll and related data. At least one
legislative data group is required for each country where the enterprise operates. Each
legislative data group is associated with one or more payroll statutory units.
Note: For payroll purposes, it is recommended to have one legislative data group for
each country, since you define elements, formulas, and payroll definitions for a
legislative data group. If you have multiple legislative data groups for a country, you will
need to define the information again for each legislative data group.
Oracle Fusion Payroll is organized by legislative data groups.

 Each legislative data group marks a legislation in which payroll is processed, and
is associated with a legislative code, currency and its own costing allocation key
flexfield structure.
Note: You assign the costing allocation key flexfield when you create a legislative data
group, though you can use the same costing key flexfield across different legislative
data groups. It is recommended that you assign a costing key flexfield when you create
a legislative data group, even if you are not using Financials, since you cannot edit the
flexfield value once the legislative data group is created.
 A legislative data group is a boundary that can share the same setup and still
comply with the local laws.
 A legislative data group can span many jurisdictions as long as they are within
one country, and contain many legal entities that act as payroll statutory units.
 Each payroll statutory unit can belong to only one legislative data group.

Instructor Note: Legislative Data Groups

Students may question this statement “At least one legislative data group is required for
each country where the enterprise operates.“ This statement can be interpreted in
multiple ways:
A legislative data group is typically required only if you are implementing Payroll, and a
separate LDG is required for each localization that Oracle provides. If you are not
implementing Payroll, you may choose to limit the number of legislative data groups.
For example, If you are implementing Talent and Compensation only, you need not
create a legislative data group for each country.
Some example scenarios:
 Company A, an EBS company that implemented Compensation only: Since EBS

model has hard partitions they created 32 legislative data groups to match their
partitions. This resulted in high maintenance for them; for example, they had to
reenter their jobs information 32 times, which could have been avoided.
 Company B, a Peoplesoft company that implemented Compensation and Talent:
They decided to implement legislative data group by regions to suit their
requirements.
 Company C, a Peoplesoft company that implemented Compensation only: They
just created one legislative data group.
All the above scenarios are correct. The difference is the amount of work required to
maintain the created legislative data groups.
You can add a legislative data group at any point in time. So, if in the future you decide
to implement Payroll, you can still add the required legislative data groups.

Instructor Note: Activity Timing
Approximate Activity Timing: 10 minutes

.

Student Activity: Defining a New Legal Entity

Using your activity guide, do the activity specified in the title of this page.

Activity 2 Introduction: View Legislative Data Group

Associated with Legal Entity
Background
You created a legal entity. You want to view the legislative data group associated with
the legal entity.
Requirements
 Use the bold text for the object names, replacing the XX with your initials, as
indicated by your instructor
 You must have access to Oracle Fusion Application InFusion database or

comparable training or test instance at your site, on which to complete this
practice.
Activity Scope
View the legislative data group associated with the legal entity XX InFusion Financial
you created earlier.

Activity 2: View Legislative Data Group Associated

with Legal Entity
In this activity, you view the legislative data group associated with a legal entity.
Start Here
Deployment page

Structures for Human Capital Management - Define Legal Entities for Human
Capital Management.
1. In the Manage Legal Entity HCM Information task row, under “Selected
Scope” column click on “Select…”
2. Select Scope pop-up window will be displayed
3. In Legal Entity lookup, choose “Select and Add” and click on “Apply and Go
To Task”
4. In the search window, query for “XX Infusion Financial”, select it and click
on Save and Close
5. Location: Legal Entity: XX Infusion Financial page
6. Click the Payroll Statutory Unit tab.
7. In the Associated Legislative Data Group field, Group field, note that the
legal entity you created is automatically associated with the US Legislative
Data Group.
8. Click Done.
In this activity, you learned how to view the legislative data group associated with a
legal entity.

Define Legal Entities for HCM Review Question 1

Your legal entities can be identified as legal employers and therefore, are available for
use in Human Capital Management (HCM) applications.
1. True
2. False

Define Legal Entities for HCM Review Question 2

You must enter legal employers on worker assignments in Oracle Fusion Human
Capital Management.
1. True
2. False

Define Legal Entities for HCM All Questions and

Answers
1. Your legal entities can be identified as legal employers and therefore, are
available for use in Human Capital Management (HCM) applications.
True
2. You must enter legal employers on worker assignments in Oracle Fusion HCM.
True

Lesson Highlights
You should have learned how to:
 Define legal entities for HCM

Jobs Mail Id

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Jobs Mail Id

Uploaded by

Copyright:

Available Formats

Global HR Implementation

Define Legal Entities for HCM

Define Legal Entities for HCM

 Define legal entities for HCM

Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 1

Legal Entities Overview

 Facilitating local compliance

2 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Legal Entity Role

Individual legal entities:

 Own the assets of the enterprise

Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 3

Legal Entity Considerations

4 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Demonstration: Managing Legal Entity HCM

Review the HCM information for your legal entity.

Sign in is hcm_impl or hcm_impl1.

2. Click the Search button.

Location: Manage Legal Entity HCM Information page

4. In the Legal Entity Name field, enter US1 Legal Entity.

Location: Legal Entity: US1 Legal Entity page

Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 5

10. In the Allow Employment Terms Override at Assignment field, specify

13. Click Done.

You have demonstrated how to manage legal entity HCM information.

6 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Legal Entity and its Relationship to Divisions

 The division is an area of management responsibility that can correspond to a

Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 7

Instructor Note: Activity Timing

Approximate Activity Timing: 20 minutes

8 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Student Activity: Defining a New Legal Entity

Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 9

Activity 1 Introduction: Defining a New Legal Entity

 You must have access to Oracle Fusion Application InFusion database or

10. 10000 Broadway

11. 11000 Broadway

12. 12000 Broadway

10 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 11

Activity: Defining a Legal Address

These task lists are expanded: Workforce Deployment - Define Common

1. In the Manage Legal Addresses task row, click Go to Task.

Location: Manage Legal Addresses page

Location: Location Create dialog box

3. In the Address Line 1 field, enter Your.Assigned.Address.

4. In the Postal Code field, enter 30314 and press Tab.

5. Select the row containing Atalanta, Fulton, GA.

Location: Manage Legal Addresses page

7. Click Save and Close.

Location: Implementation Project: XX Workforce Deployment page

12 Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Location: Edit Status dialog box

9. In the Status field, select Completed.

10. Click Save and Close.

Location: Implementation Project: XX Workforce Deployment page

In this activity, you learned how to create a legal address.

Copyright © 2013, Oracle and/or its affiliates. All rights reserved. 13

Activity: Defining a Legal Entity

These task lists are expanded: Workforce Deployment - Define Common

1. In the Manage Legal Entity task row, Click Go to Task.

Location: Manage Legal Entities page

Location: Create Legal Entity page