SAP PP Define Company

a Company represents the highest-level organizational unit used for external reporting, especially when multiple company codes exist under the same corporate group. It is not the same as a company code. A Company is more like a parent or holding organization, while Company Codes are the individual legal accounting entities within it. Company creation in sap is optional.

Important points –

It allows to generate financial statements as per legal requirements of country where company is located.
Can allocate more than one code to company.
It is considered as an optional organization unit in SAP.

Defining a Company helps SAP understand the consolidated business structure. Even though it is created mainly in the Enterprise Structure area of SAP (and used more in FI/CO), it still forms the base of the PP organizational setup.

Prerequisites -

You should understand the organization’s global corporate structure.
To define a Company, you must have: company name, city and country, address details and currency (for consolidation)
Decision on Whether multiple company codes will exist.

Here’s a step-by-step to Define Company –

Step-1: - Enter the transaction code OX15 in SAP command field and press Enter to continue.

Step-2: - Change View “Internal trading partners”: Overview window appears. Click on the New Entries.

Step-3: - New Entries: Details of Added Entries window appears, enter the details in the fields –

Enter an alphanumeric code key that represents the group of company.
Enter name of the company.
Enter Country Code.
Enter language key.
Enter local currency.

After the details are entered, Click on Save button.

Step-4: - Select the “customizing request” and click on right mark to continue.

Step-5: - Status bar displays the below message once the default values saved successfully.

Technical details –

Transaction code: OX15
Menu path: SPRO → Implementation Guide for R/3 Customizing (IMG) → Enterprise Structure → Definition → Financial Accounting → Define Company.