What Is a Commercial Entity? [Business Banking Guide]

If you’re wondering “what is a commercial entity?” you’re in the right place.

In this article, we’re going to give you a complete breakdown of the various types of commercial entities.

Of course, if you already have a commercial entity and you would like to explore banking options, you might want to consider our free guide on how to open a business bank account in Cyrpus or any of our other business banking resources.

Feel free to use the table of contents to jump ahead to any sections that are immediately relevant to your search.

Table of Contents

  1. What Is a Commercial Entity?
  2. Eligible Commercial Entities
  3. Frequently Asked Questions
  4. Ready to Explore Your Options?

What Is a Commercial Entity?

A commercial entity refers to a privately held (non-government) entity that has been registered for the purpose of engaging in commercial trade. They can take the form of a corporation, limited liability company, partnership, limited liability partnership, limited liability limited partnership, or other legal entities as defined by the jurisdictions where they register and intend to operate.

Of course, the specific type of entity that you may want to consider will depend on a wide range of variables. Not the least which include the industry, liability requirements (or objectives), tax considerations, and much more.

With this in mind, it’s important that you consult a professional advisor when deciding on the specific entity that is best for you and your business. That way, you can make an informed decision while considering all of the potential variables that could cost you down the road.

Here’s another look at common commercial entities that business owners consider depending on their situation.

Business Entity Type:

  • Corporation
  • Limited Liability Company
  • Partnership
  • Limited Partnership
  • Limited Liability Partnership
  • Limited Liability Limited Partnership

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Eligible Commercial Entities

While commercial entities, as defined above, can facilitate a wide range of business activities, eligible commercial entities typically refer to one thing in particular… commodities.

In fact, they play an important role in facilitating the trading of commodities futures. Without eligible commercial entities, many investors would either be unable to participate in commodities trading at all. Or, in certain instances, they might be required to take delivery of their physical commodities personally.

In short, eligible commercial entities are the authorized party in commodities futures that can actually take delivery of physical commodities if needed. They play this role on behalf of other traders who may not have the facilities, staff, or infrastructure to actually hold physical commodities themselves.

Frequently Asked Questions

Below are two of the most common questions that we receive from people looking to understand what a commercial entity is. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.

What Does Business Entity Mean?

Business entity refers to the type of structure that you use when legally registering your entity. For example, is your business registered as a corporation, limited liability company, partnership, or another type of entity?

What Is an Eligible Commerical Entity?

An eligible commercial entity is an authorized entity in the commodities futures market. Eligible commercial entities are authorized to take delivery of physical commodities on behalf of other traders. In essence, they provide a backstop for investors in case they find themselves in a situation where they must take delivery of the commodities that they purchased.

Ready to Explore Your Options?

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Of course, if you have any questions, please contact us directly.

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