Setup Considerations: legal entity structure

What this achieves

A legal entity is a registered company that employs people, and it carries the country, currency, and tax rules applied to everyone assigned to it. This is the single most consequential structural decision in Humavera, because payroll, statutory reporting, and consolidated figures all follow from it.

This is a decision for your advisers

Humavera records the entity structure you already have. It does not tell you what structure you should have.

How many companies you register, where, and who they employ are legal and tax questions with consequences well beyond this product. Take them to your own legal and tax advisers, then record the answer here.

Decision 1: one entity per registered company

Create one legal entity per registered company. Not one per office, not one per department, not one per country you happen to have people in.

Two offices of the same registered company are locations, not entities. A department spanning two countries is still one department; the people in it may sit in different entities.

Example: HC Corp UK Ltd is one registered company with offices in London and Manchester. That is one legal entity and two locations — not two entities.

Decision 2: what the entity governs

Everything below follows from an employee’s entity assignment.

Option	Description
Currency	The currency payroll runs in. Humavera never converts between currencies.
Tax jurisdiction	Which statutory rules are applied to their pay.
Pay groups	A pay group belongs to one entity, so entities determine how many payroll runs you process.
Consolidated reporting	Figures are segmented by entity and by currency, never blended.

Because there is no exchange rate anywhere in Humavera, a second entity in another currency means your reporting has two currency blocks rather than one total. That is correct behaviour and it surprises people who expected a single figure.

Example: HC Corp employs through four registered companies — in the United Kingdom, the United States, Côte d’Ivoire, and Egypt. That is four entities, four currencies, four statutory profiles, and at least four pay groups. Every one of those follows from the entity count, which is why this decision is worth getting right before anything else is configured.

Decision 3: getting it wrong is expensive after payroll

Before payroll has run, an entity is a record you can correct. After payroll has run against it, the entity is attached to finalised payslips that are immutable by design.

Moving an employee between entities after they have been paid is not a field edit — it is a change to which company employed them for a period, with consequences for their payslips, their statutory reporting, and their year-end figures.

Get the entity right before the first pay run. It is the least reversible decision on this page.

Decision 4: entities you do not pay through

You may hold entities that employ nobody yet, or that exist for reasons other than payroll. That is fine — an entity with no pay group never appears in a pay run.

What you should avoid is the opposite: employing people under an entity you have not properly configured, because they will reach payroll without the statutory rules that apply to them.

Decision 5: deleting an entity

The delete confirmation states that it cannot be undone, and names what blocks it: an entity cannot be deleted while employees or pay groups belong to it.

Treat deleting a legal entity as something you do only for one created in error and never used. An entity with employees or pay groups attached will refuse to delete. One that has run payroll should be kept regardless of what it holds today, because the payslips it issued belong to it.

What is expensive to change later

Decision	Cost of changing later
An employee’s entity after payroll has run	Highest. Finalised payslips are immutable and belong to the entity that issued them.
Entity currency	Highest. Payslips already issued stay in the original currency.
Tax jurisdiction	High. Statutory profiles and everything already calculated are tied to it.
Deleting an entity with history	Blocked while employees or pay groups belong to it. Keep it regardless — its payslips belong to it.
Entity name	Low. It is a label.

What happens next

Create your entities, then build business units and departments beneath them and assign employees. Payroll configuration follows: a pay group belongs to one entity, and a statutory profile applies through the entity’s jurisdiction.