Until quite recently, corporate entity management was a fairly straightforward process. For most businesses the job amounted to little more than maintaining a complete list of entities, updating officers’ and directors’ information from time to time, and fulfilling the occasional filing obligation. It was enough for many companies to fill binders with company records and put them on a shelf, seldom if ever to be reviewed again.
Unfortunately, that’s no longer the case. Increased oversight, along with growing shareholder anxiety and expanded filing demands, have radically altered the complexity of entity management in recent decades, placing an ever-greater burden on corporate secretaries, compliance officers, in-house counsel and
Then there’s the matter of scale. Larger corporations now range well into the hundreds, and occasionally thousands, of entities, spread across multiple global jurisdictions. Even much smaller companies consisting of only a handful of entities are still at the mercy of a surprising number of state-specific regulations and associated compliance demands.
Entity management is nothing short of a critical business function, and companies that fail to do it well expose themselves to significant risk. Missed deadlines and lapsed filings are a quick route to fines and fees, to say nothing of the audits and many other forms of unwanted scrutiny they can invite. And for public companies, filing delays and loss of good standing can even impact investor confidence, leading to share price declines.
The question is, how do you keep up? If you’re like most corporate secretaries or compliance officers, given your current workload you’re probably finding it harder and harder to give entity management anything like the time and attention it deserves.
Automation offers a clear solution. The recent emergence on the market of hosted, online applications that combine registered agent service and entity management functions has transformed the quality of tools available to corporate secretaries, enabling better compliance and governance at every stage of the corporate
In the past, many companies relied on commercial or house-built software for their entity management functions, but web-based solutions have nudged those applications toward obsolescence. The advantages of online entity management are legion: Greater system access means users are no longer tied to a particular location or workstation. Collaboration is easy. IT support is for the most part unnecessary. And with vendor-hosted systems, data can be held offsite on secure servers, reducing your IT costs and dispensing with the problems of failure-prone local storage devices and files gone missing because of departing personnel.
There are a number of entity management systems on the market today, but they aren’t created equal, and corporate secretaries should shop around before settling on one and beginning the considerable tasks of data transfer and implementation. The following sections outline some of today’s chief entity management challenges and offer a few best practices that can lead to a better compliance and governance future for any company.
To download a full copy of CSC’s Entity Management whitepaper, please click here.