Embracing technology to navigate the shift to remote work
The events of 2020 forced businesses to significantly change the way they operate. This sparked a re-examination of the business-as-usual mindset in almost every facet of work.
Technology has proven to be a lifeline for businesses transitioning from office-centric work to a work-from-home culture. With numerous companies implementing permanent or hybrid remote-working policies, the attention of both management and employees has shifted to prioritizing the most business-critical tasks, while eliminating, ignoring, or outsourcing low-value work.
How does a corporate legal department manage various demands and obligations?
Certain tasks can be better managed through outsourcing. This allows employees to focus their attention on essential responsibilities.
A prime example is entity data management. Entity management is typically defined as completing the tasks required to keep an entity compliant with the governing laws, regulations, and rules based on where the entity is registered to do business.
In addition, entity management includes tracking the material data associated with the entity within an entity management database and being able to distribute this data as needed.
What are the benefits of entity management and why is it important?
The concept of entity data management may seem simple enough. So why would a company need to outsource this responsibility?
Companies often consist of multiple subsidiary entities, all of which must be carefully managed to ensure proper compliance and uphold strong governance. Many of the associated tasks are tedious but absolutely necessary. A failure to perform any of the necessary functions can lead to penalties and disruption of the business.
At some point in the lifecycle of every organization, the number of mundane but required tasks reach a level that warrants a re-evaluation of how best to administer that work.
There are service providers that have combined services and technology to assist organizations in managing multi-entity compliance and governance. The most advanced service providers integrate years of industry experience with software and other technology solutions to address business challenges and offer tailored solutions to meet the customer's unique needs.
How would an outside company managing my entities work IRL (in real life)?
The first step for a legal team considering outsourcing is to understand the following: how they are currently completing the work and how much time it takes, what it costs to complete the work, and how removing that workload could create greater dividends for the employee and the organization.
Establishing a baseline of the cost and the possible benefits will help inform the decision to move forward versus keeping the status quo.
If you are unable to easily determine this information, we suggest you seek out a service provider to help you gather this data.
In terms of entity managed services, the typical areas of opportunity include the following:
- Implementing a central system of record (entity management database) for all entity information
- Engaging a service provider to update the entity data in the system of record, both at the deployment of the database and as an ongoing service
- Election of officers, directors, and managers through an annual general meeting (AGM) or through unanimous written consent
- Management of the organizational documents of the entities
- Creation and distribution of organizational charts
- Report creation and distribution
- Database security, including the issuance and discontinuance of user IDs for accessing the central system of record
- Document filing and retrieval, both in the entity’s country of formation and in other jurisdictions
- Submission of country-level, province/state-level, and local-level filings required for the entity to do business in a particular jurisdiction
What typical benefits should an organization expect if they utilize entity managed services?
When an organization is deciding whether to outsource the management of its entities, it’s important to consider which functions and groups may be impacted.
By identifying the groups that are consumers of entity data, an organization can better gauge the benefits of outsourcing this function. Documenting the specific needs of the Corporate Secretary and of legal, tax, finance, and other departments allows an organization to determine where its current process is successful and where improvements could be made. This in turn creates the framework for what successful outsourcing entails.
Here are some examples of where companies have achieved greater efficiencies:
- Smooth integration of filings and transactions with a central system of record
- Additional bandwidth created by the inclusion of a managed service team for entity data management
- Shifting employees from data inputters to data managers
- Documenting of corporate actions and other entity-driven events
- Time saved when it comes to updating data into the central system of record
- A central hub to receive and document information from all entities
- Easy and secure distribution of information to relevant teams within an organization
Again, identifying and outsourcing low-value, time-consuming database tasks provides an organization with the flexibility to deploy employees to handle the high-value responsibilities that are core to their specific business or team.
Entity management is everyone’s responsibility. Or is it?
A key advantage of outsourcing data entity management to an expert service provider is continuity in the face of disruption.
Personnel changes — whether employees being promoted within the organization or leaving the organization entirely — highlight the need for uninterrupted handling of entity matters. Having a service provider run the management and maintenance of your organization’s entity data based on your specifications provides a critical level of assurance that your data is being consistently updated.
This approach pays dividends in a variety of ways, including the ability to quickly determine what data exists for an entity, the capacity to train users to access the data easily, and the successful, long-term well-being of the database.
Lastly, from an executive management perspective, having a single company fully responsible for the upkeep and maintenance of entity data removes all doubt about where the buck stops when problems arise. No longer does an organization have to stress that entity management, data updating, and data input is “everyone’s responsibility”, which in many cases turns out to be no one’s actual responsibility.
How do you ensure that entity data is both accurate and up to date?
With a single source of truth for your company’s entity data, you can be sure that those who need access to entity data are doing so securely and with confidence that the information is current. It also eliminates the concern of version control.
Using a cloud-based platform allows users to access data from anywhere, at any time. This removes the burden of sifting through and responding to information requests, freeing legal teams to focus on more important matters.
Finally, when the information is managed for you by a team of experts, you can be sure that your organizational charts are tracked, major compliance events and deadlines are calendared, and interdepartmental collaboration is done seamlessly. You can also get assistance with management, document storage, and business licensing. You can be assured of never missing another entity compliance event or deadline again.
Related content
What to look for in an entity compliance data management solution
Ensure good governance and compliance with strategic entity management
What does best-in-class entity management look like?
Mastering entity data compliance
Learn more
The right comprehensive solution effectively and efficiently manages your data to save time and resources and increase ROI — giving you peace of mind so your team can focus on what’s most important.
Contact CT Corporation today to learn more about how we can help you navigate your entity management needs.
