Business entity represents a structural unit of a business domain. Business entities are subdivided into active and passive, in order to reflect the subject - object relationship between them. Normally, active entities (business participants) perform some action upon passive entities (business objects) during the course of some business activity, whereby adding value to passive entities.

A programmer (business participant) develops a new software system (business object) for his company.

A balance sheet (business object) is used by the whole finance department (business participant) in order to create another business object - financial forecast for the next year.