Creating Legal Entity in AX and factors to think about!!!

Scenario: An implementation requires us to install and configure AX for a group of companies which contains multiple legal entities. The question we need to answer is to setup these legal entities as Business units or different legal entity in AX.

We need to ask the following questions befor making a decision on legal entity.

• Management and sponsorship team goals: Sometime customers might want to bring organisational changes to consolidate different legal entity in conjunction with ERP implementation. 
• Sharing of data across legal entity: If the customer master, item master, catalog, vendors etc needs to be shared across legal entity, then there might be enough commonality between the organisation to create one legal entity and reduce data maintenance. 
• Data security: If one company in the group is directly competing with another entity in the group, then it might be difficult to keep sensitve information away from each other. 
• Integrations with third party systems: Will the integrations with external parties be simplified or become more complicated in a consolidated legal entity environment. 
• Different business processes which cannot be reconciled: Is the sponsor team want to drive single process for all legal entity going forward?
• Will there be any difficulty in configuring automatic defaults for financial dimensions on transaction. Sometimes ensuring that the expenses and income are allocated to correct business units automatically(based on transaction inputs) might be a critical deciding factor. Using management reporter reporting based on different business units will allow users to create statuatory reports. 
• Sometime it might come down to trade off between maintenance of multiple companies vs single company in AX. In most cases creating business units instead of legal entities would win. 

How To Create Legal Entity in AX:

• Click Organization administration -> Setup -> Organization -> Legal entities
• Click New ->Give company Name ->Country/Region ->Ok
• Specify Language under General tab
• Specify Addresses  ,Contact information ,tax registration number .

Company Setup :

• Click Organization administration/setup /Addresses/Address setup
• Define an Address Format 
• Define Country/Region, State/Province, County, City, District, Street, Group Postal Codes. 

Once this set up are done it could be used in Addresses fast tab on Legal entities form.

Please add any other variables that you think is critical for decision on legal entities in the comments.