An identity record describes the trading partner and contains information that is referenced when a business process is run that involves the trading partner.
Every trading partner is represented by at least one record, called an identity. A trading partner can have more than one identity to represent the different ways it does business. For example, a company's central office procurement organization might be radically different from its manufacturing supplies procurement organization. In such cases, you need a separate identity record for each organization.
A base identity is a regular identity that you can use as a starting point to create a new identity. The base identity maintains a link to the identity that inherited its properties. If you modify the base identity, all related identities (that is, ones that inherited the base identity properties) change, as well. When you create an identity record that uses a base identity, everything in the new identity is the same as in the base identity, except the identity name, description, and other unique parameters, such as unique identification numbers.
You must create an identity before you can create a transport, document exchange, delivery channel, packaging, profile, and (when required) a contract. Each of these components references an identity.