This option is used to set up additional business units for our organization. By default, a business unit is set up by Dynamics 365 CE during our organization setup. This business is created with the same name as our organization. This business unit is known as the root business unit. We can't rename or delete this business unit. We can use this business unit to create a further child business unit.

Security roles in Dynamics 365 CE are maintained based on the business unit. When we change the business unit of the user, all of its security roles are removed automatically. To create a new business unit, we can navigate to Business Units | New and add our child business, as shown in the following screenshot:

As can be seen in the preceding screenshot, the Parent Business unit field is automatically filled with the root business unit. Once the business unit is created, we can add users to our business unit.