How does Google use entities?
To tell similar names apart and connect facts to the right thing. When Google launched the Knowledge Graph, its example was a search for Taj Mahal: "do you mean Taj Mahal the monument, or Taj Mahal the musician?" Today its help pages say knowledge panels appear for "entities (people, places, organizations, things) that are in the Knowledge Graph."
Google's structured data documentation applies the same idea to businesses. Organization markup on your home page "can help Google better understand your organization's administrative details and disambiguate your organization in search results." Disambiguate means telling your company apart from others with similar names.