{"ok":true,"canonical_url":"https://dealroom.so/glossary/legal-entity","api_url":"https://dealroom.so/api/public/glossary/legal-entity","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"legal-entity","term":"Legal entity","group":"People and paperwork","definition":"A business structure recognized by law (e.g., LLC, Corporation, Partnership) that can enter into contracts, own assets, and incur liabilities independently. You'll form one to acquire the business.","what_it_means":"You will typically acquire a business using a new legal entity (an LLC or Corporation) to protect your personal assets from business liabilities. This entity will be the borrower on the SBA loan. Consult with your attorney to choose the best structure for your situation.","url":"https://dealroom.so/glossary/legal-entity","official_sources":[],"related":[{"slug":"llc","term":"LLC","url":"https://dealroom.so/glossary/llc"},{"slug":"corporation","term":"Corporation","url":"https://dealroom.so/glossary/corporation"},{"slug":"partnership","term":"Partnership","url":"https://dealroom.so/glossary/partnership"},{"slug":"loan-document","term":"Loan document","url":"https://dealroom.so/glossary/loan-document"}],"related_questions":[{"question":"What if the acquired business changes its legal entity structure after the SBA loan is approved?","url":"https://dealroom.so/sba-7a/questions/what-if-the-acquired-business-changes-its-legal-entity-structure-after-the-sba-loan-is-app"},{"question":"Does my business have to be a specific legal entity type for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/does-my-business-have-to-be-a-specific-legal-entity-type-for-an-sba-7-a-loan"},{"question":"What happens if the acquired business changes its legal entity structure after the SBA loan is approved?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-the-acquired-business-changes-its-legal-entity-structure-after-the-sba-loa"},{"question":"If the business has a separate legal entity owning its key intellectual property, how does this affect collateral?","url":"https://dealroom.so/sba-7a/questions/if-the-business-has-a-separate-legal-entity-owning-its-key-intellectual-property-how-does-"},{"question":"Can a lender approve a change in a borrower's business legal entity structure without prior SBA approval?","url":"https://dealroom.so/for-lenders/questions/can-a-lender-approve-a-change-in-a-borrower-s-business-legal-entity-structure-without-prio"},{"question":"Can a lender approve a change in a 7(a) borrower's legal entity structure without prior SBA approval?","url":"https://dealroom.so/for-lenders/questions/can-a-lender-approve-a-change-in-a-7-a-borrower-s-legal-entity-structure-without-prior-sba"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Legal entity","url":"https://dealroom.so/glossary/legal-entity","source_type":"DealRoom Data"}}