Benefits of LEI Number for your Business

What is the LEI number?

The legal entity identifier (LEI) code is a unique global identifier code that is a tool to improve the quality and accuracy of the financial system. It provides safety from the risk of the global financial crisis by keeping a close eye on each of its financial actions.

It is in the form of a 20-alpha-numeric or bar-code which is a unique identity for the entity that deals in financial transactions. It is publicly available data of the organizations involved in the finance market, globally. It was developed by the international organization for standardization.

The LEI number system has emerged as a solution to identify an organization in the finance market uniquely. Various agencies like offer LEI registration and renewal services. The Uniqueness of the Code

The main purpose of an LEI is to assign a unique identity to a business.

Among 20 alpha-numeric characters, the first 4 are characters for LOU (Local operating unit) that issued the LEI and the characters from 5-18 are the unique characters by the LOU to the particular organization. The rest two characters of last are checksums.

This code does not reflect any information about the organization. It is a unique identity for the organization in the finance market in different jurisdictions nationally.

Points To Remember About LEI Number

  • Generally the local authorities, LOU provide the LEI number. Also, One may renew the code from any of the LOU. The code will remain the same.
  • The validity of this unique code is 1 year from the date of its registration. This unique code has to be renewed annually to be a part of secured finance transactions.

Benefits of LEI Number for A Business

There are several benefits of an LEI number that businesses use to get acclamation across the globe. Some of the well-known benefits are discussed below.

Create Your Unique Identity Globally

Being unique is always the first key to a successful business. Uniqueness may be in terms of design, quality or simply the legalities that bind a business from international trade. For the same, the LEI number answers the question, ‘Who Are You?’ for your business legally, which is helpful for getting more customers globally.

Establish More Platforms

  • Having an LEI provides you with more platforms to connect with.
  • It is possible to perform trade or do business in the EU, US or UK. But all these nations first are required to have an LEI number.

Helps Practice Transparency

The LEI aids in providing transparency in the global finance market. The data verification process for these business agencies could reveal any false identity claims made by the company. And joining LEI you are making this global financial marketplace easier and safer.

Makes Verification Process Easier

The verification process could often become full of hassles due to a large number of clients. Also, the time consumed for verification may be large. The LEI number helps in reducing the time consumed for verification. It makes the process simpler by registering as a legal entity and providing a unique code.

Reduced Risk During Transactions

  • The acceptance of LEI at a larger level has helped in reducing the risk of unknown transactions at the global level.
  • LEI number is a globally unique identifier.
  • It makes the verification process short and easily accessible thereby promoting transactions among different national jurisdictions.


The LEI number has been more of a necessity in the present era. As businesses look to expand at international levels and conduct global transactions, the need to verify their authenticity becomes obvious. To solve this issue, a global database in form of an LEI directory has been prepared. It helps keep the business sector secured against fraud and other vulnerabilities due to distance.