Compliance Life Cycle: Guide to Annual Reports and Licenses

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Caitlin: Hello, everyone, and welcome to today's webinar, "Compliance Life Cycle: Guide to Annual Reports and Licenses." My name is Caitlin Alaburda, and I will be your moderator.

Joining us today are David Jefferis and Calla Heathman. David is a Senior Director of Product Management for Global Compliance and Governance Services at CSC in Wilmington, Delaware. David is responsible for driving the strategic direction of CSC's compliance solutions. With CSC for over 15 years, he has significant experience providing training, implementation, and consultative services to clients of CSC Entity Management. Calla is a sales engineer that supports the Corporate Legal Services Group at CSC and is based in Wilmington, Delaware. Since joining CSC in 2015, Calla has focused on B2B management and consulting to find solutions that best fit the needs of new clients.

And with that, let's welcome David and Calla.

Calla: Thank you, Caitlin. Good morning, everyone, and thank you for joining us today. We're excited to provide some insight into CSC's annual report and business license services. But before we get started with today's agenda, we wanted to give a quick update and, if you're not familiar, an introduction to CSC and who we are as of the new year.

CSC remains a privately held organization that now has almost 200 years of combined history across all of our business units. And together, we provide tailored solutions and deliver world-class service in over 140 jurisdictions worldwide. We offer support through every phase of the business and investment life cycle, with over 7,500 employees that are specialized with our diverse portfolio of clients.

We continue to be the CSC that you know and love by remaining the trusted partner for more than 90% of Fortune 500 companies and also 90% of the Best 100 Global Brands out there. We work with 10,000 law firms and now support more than 70% of the top private equity firms worldwide. Always keeping our clients at the forefront of what we do and we truly are the business behind business.

So with that, let's get down to business. We'll work through kind of a wide array of information that relates to annual reports and business licenses throughout the entity and compliance life cycle today. Ultimately, that's because we want to try to create best practices by staying in good standing. So to start, we'll discuss the difference between annual reports and business licenses and what CSC really means when we speak to those two topics since oftentimes it may not be very clear which filing we're talking about or what you're talking about so we can be on the same page.

Next, we'll look at some of the current trends in the workplace and the industry and what you can expect throughout 2023 in the business landscape. We'll touch on different responsibilities that organizations have as it relates to these kinds of filings with the annual reports and licenses, but also how managing these can become very challenging and what that means if you should fall out of good standing. But after that, we'll take a look at the compliance life cycle, how different stages can have different impacts on filings, and then we'll discuss some of those best practices that I mentioned that we typically see in the industry and what we would guide you to use for those compliance filings.

And then, possibly most important, we're going to cover how CSC is able to help with the annual reports and licenses alongside of a quick few technology demonstrations to illustrate to you what you would see if you were partnering with CSC for these services.

Along the way, we're going to ask a few poll questions to get your feedback, and then we'll close out the session with a final poll and live Q&A session with myself and David.

So again, let's go ahead and get started. But as promised, David, would you kind of help us understand a little bit about the annual reports and really what that means for us here at CSC?

David: Absolutely. It sounds like we've got a lot of content to cover, and I'll just start by saying I'm excited to be with Calla today and with our audience to go through all of this wonderful information. So we'll start with this distinction between annual reports and business licenses. We're going to talk about this quite a bit. So again, the goal is to make sure that we're really all on the same page.

I'll start with the annual report side of things, which I think is relatively straightforward. So we're talking about filings that are due typically on an annual basis, although that's not always the case, with the secretary of state or sort of equivalent issuing office so to speak. And so these are sort of, again, typically filings that are due on an annual basis, and the whole point of it is really to ensure that your entities are maintaining what's called their good standing status. As we get a little bit deeper into the presentation, we'll talk about the ramifications if you're not maintaining your good standing status.

But again, the term "annual report," it's a bit of a generic term. Different states have different names for these filings. So for example, in California, it's called a statement of information. There's other jurisdictions where you hear the term franchise tax reports. But fundamentally, we kind of clump this into the category of annual reports. Again, critical in terms of maintaining the good standing status of your subsidiaries.

There's also a unique logic in terms of when these filings are due from one state to the other. So in some places, like Delaware, it's relatively simple, where for-profits are due a certain time of year. Your LLC annual reports are due a different time a year. But in other places, it could be based on what's often called an anniversary filing, based on when you registered to do business in that state. So Arizona is an example of when you registered would dictate when the annual filing is due. In other places, the fiscal year end of the entity itself will play into the calculation. California is an example of that. So pretty quickly it gets a little bit convoluted in terms of when actually are these filings coming due.

And then in terms of the data that's required in these filings, I would say that there's commonality across jurisdictions, but there's not complete uniformity. So again, it gets a little bit challenging, especially if you have a portfolio of entities doing business in a broad array of jurisdictions.

But when I start thinking about business licenses, that's when my head starts spinning, and, Calla, that's when I turn it over to you to kind of provide a breakdown of really what we're describing here.

Calla: Sure, David. Very much like that, they determine the annual reports, but really here at CSC we like to focus on the filing requirements that are falling outside of those secretary of state mandates or what we would consider a true tax filing. We're really thinking about other state licenses, other county requirements, or more local with city or municipality, township regulations that will impact the business. We're not really just focusing on those general license requirements though. We do also include industry-specific requirements across our license sector. So that does add a little bit more ambiguity to the mix because those are not really called business licenses. They are called something specific for your trade or for your industry.

And that really expands the complexity that we have. David alluded to some of those filings being different, some of the information being different, not totally uniform across all jurisdictions. But there really aren't as many state registrations or annual filings that maybe you would have for a license. So today, we see over 160,000 filing jurisdictions that you might have to deal with when it comes to business licenses or industry-specific licenses.

Now it can get very much more complex. Part of that is going to be really understanding where CSC works or some of the examples of the regulatory bodies that we would include as part of our license service or license department if you will. We do include state or local departments of health for example or working with departments of insurance that are issuing licenses. And then a local level would be something like the City of Newark in Delaware. These authorities really mandate anything from different permits, licenses to sell products or to practice things, general licenses, and even contractor licenses locally regulated by Newark here. And that's all dependent upon the scope of your organization and your work. Depending on again the nature of these, they could be due at all different times, like David had mentioned. And you can also be required to have multiple licenses and license types, which is going to be so different from industry to industry.

And that's why it's really important for us to explain what we mean by these two items because although we can support both, we do have different vectors to do different things. And we want you to know that we have that solution to fit maybe more than you think and that it really just depends upon where you are and what you're doing.

And now that we've really defined the CSC annual report topic and business licenses, David, would you mind maybe switching gears a bit to what our current market landscape looks like?

David: Sure, absolutely. I mean, we'll get more into the specific service offerings that CSC has around annual reports and business licenses, but we wanted to take a moment to talk about sort of the climate that corporate legal departments and law firms find themselves in. And so there's a couple of items here on the slide that I'll touch on briefly.

One, a trend that we seen for number of years is this idea of cost cutting, where corporate legal departments are being expected to somehow do more and produce more with fewer resources. These are sort of competing ideas, right? And so, really, I think what we've seen is that these corporate legal departments are looking to technology partners, to service partners to find those efficiencies to again produce more with, again, fewer resources.

Another major trend that I think we've observed in the last couple of years is that data is key and really the rise of legal operations, the idea that legal departments need to be really a strategic partner to the business. And so one of the ways to do that is to really kind of shift focus on the things that matter and that are, in fact, strategic and again finding opportunities to partner with other organizations to take care of work that might be more mundane or routine so that the focus can be really around strategy.

And then the last one that I'll touch on for a moment is the hybrid work model. And so in a slide or two, Calla is going to talk a little bit about sort of the day-to-day responsibilities of handling annual reports, the day-to-day responsibilities if you're someone that has oversight of licenses. And really what we have found over the years, through our experience of working with clients, is that it's fairly common that the person or team responsible for annual reports within your organization is perhaps different than the person or team that's responsible for licenses. And so that in and of itself can create some challenges. And then obviously, when folks are working remote or in a hybrid model, it can sort of exacerbate those challenges, where again transparency and technology and being kind of all on the same page really becomes critical.

So these are some of the trends that we've seen and that we see continuing as well. Now in terms of what's coming next, I don't have a crystal ball necessarily. But I think it's fair to say that there's going to be more and more scrutiny, not less scrutiny in terms of managing entities and licenses.

I think the most obvious example of a new regulation that's coming soon, that goes into effect next year, is the Corporate Transparency Act, which imposes new requirements around entity recordkeeping and reporting, which is going to really change a lot for many organizations that aren't exempt from that particular requirement.

In terms of annual reports, I think something that we've seen over time that we expect to continue is that states are becoming less communicative in terms of providing alerts. For years, you might get reminders in the mail or electronically. That's seeming to be less and less common, and so it just sort of raises the question, "What is our process to have that transparency to stay ahead of the game and not fall behind in terms of knowing when and where we have these annual filing obligations?"

Then the last bullet point is something that we continue to feel at CSC, which is the rising trend of corporate legal departments looking to outsource to partners, like CSC, in terms of getting help for annual filings of annual reports and license research and renewals. And we can say that our businesses around these areas has grown dramatically in terms of the number of clients that we support, the number of licenses that we renew, the number of annual filings that we're handling on behalf of organizations. So that is something that we've seen a dramatic increase of over the past several years.

So with that, Calla, I kind of alluded to this a moment ago. Did you want to talk about some of the kind of responsibilities and challenges for these folks?

Calla: Sure. Thanks, David. So as we're really all still being agile and adapting to those new landscapes, focusing on those items that may be really haven't changed much or gone away for the most of us is really what we wanted to focus on. So let's look at those responsibilities and some of those challenges that come along with having those responsibilities for companies and the filings, like the annual reports and licenses that go along with that.

So the ongoing daily responsibilities can really vary so much across the different companies, different filing types, as we had talked about. That also includes different things that you have to do to keep up with expiration dates and information needed.

So with that, this continues the idea of also doing less with more (sic), looking to outsource and organizations finding themselves in a position to really having to manage all of these different tasks, but also learn to specialize in all of them at the same time. You possibly have a lot of responsibilities as well that even fall outside of these tasks. And as you know, a lot goes into staying on top of the compliance filings, whether they're annual reports or licenses or some of the other items you see here.

There's that ongoing cycle of forming or amending, merging or dissolving entities that impacts the way that we report to those states, from either filing some of those initial lists or information statements, like David had mentioned, to renewing those and keeping your good standing, filings to close out and tie up those loose ends.

We also have to mention that it's really imperative to kind of keep a lot of this evidence or records of what's on file, historical records, what that looked like last year for you versus now. There is a need for centralized . . . You need ways to view the data at any time. And changes can happen so quickly. It's really important to have that process in place to effectively implement those changes, whether they be new or things happening to existing filings.

But aside from that, licenses can also be a whole nother animal for us. We've already noted that, depending upon the business or what you do, you may have licenses that could be specific or very general in nature depending upon many different things. So due to not only those but the difference in the governing bodies, all of the licenses will have different renewal periods, ways to file. Some jurisdictions are really still using paper today, and a lot are transitioning into that online model. But that can become difficult to manage, whether you have passwords, whether you have applications, whether you're receiving mail. David alluded to some jurisdictions not even using mailings today. So that can all be very, very difficult to keep together.

And aside from keeping up with dates and how you file, there's also that responsibility to understand the licenses that you may need or even apply to the organization, not only for where you're currently operating, but as you think about expansion and moving into new jurisdictions and new areas. That researching component can become its own full-time job, really depending upon the operations, and it requires a lot of knowledge just to know where to look and how to maintain that knowledge to follow up or if things change.

So all of these responsibilities can lead to some challenges, some that maybe we've already talked about. But let's dive into some of the things that David and myself really see the most.

Now with that, it's more or less whether you're dealing with lack of resources or addition of new employees. Maybe you're taking on new tasks. Maybe it's just the inability to find the records or pinpoint those changes we talked about.

A common denominator for a challenge is lack of transparency and visibility. And that also includes collaborating across teams or within teams or within technology. All of these responsibilities that we discussed will really eventually intertwine together. They have impacts on other filings, other departments, other team members. And again, a lot of the time, they're being taken care of by different people or even teams, right? Business sectors will handle different things.

Because of this, that major challenge becomes just navigating the transparency and trying to understand not only entity vitals that are impacting your annual reports, have there been officer or director changes or address changes. But understanding of those also impacts business licenses or vice versa. If you have a change to a license and you need to update that on an annual report, these happen kind of in different areas. A lot of the times David and I see the separation between teams, so legal teams managing those corporate matters, forming, qualifying, managing legal documents, and tax finance departments really tackling those licenses, so that separation of power.

Although there will be overlaps, because there's that separation and a lack of coordination or a lack of visibility into what's happening across those teams, we really see that major challenge of transparency. And we will dive into that more on how CSC can help eliminate the lack of visibility and actually create better collaboration a little later today in our session.

So with that, while transparency is really impacting some filing life cycles in different ways, it can lead to other challenges. So without that system in place, you could be facing late filings, which could result in penalties, whether it be by just extending the time frames that it's taking to get instated. You could have to reinstate. Or that could have financial impacts with fines. You could be experiencing a lawsuit or maybe even something more severe, like having to close down or stop operations for a short period of time or indefinitely. And that really puts a damper on things. So this is really imperative, and these are a lot of the challenges that can come from even really just again that lack of visibility, which you're going to hear that intertwines with a lot of what we talk about today.

But because every business is different, navigating a lot of those regulations, I think we alluded to this earlier, there's a whole lot of jurisdictions that mandate different types of licenses or regulations, and that can be overwhelming. So a lot of what that question becomes or the challenge becomes is how confident are we or you with what we've done and what exists. This includes things like: Do we have everything that we need to even be compliant? Are we meeting those standards? Are you maintaining the appropriate records? Do we have everything that we need to be able to set us up for success moving forward as we try to tackle those renewals and stay in compliance?

And I think again David alluded to this a little bit. While information housed at the secretary of state may be a little easier to find or a little bit more succinct, the license information is really not as straightforward. With those thousands and thousands, over 160,000 filing jurisdictions today throughout the U.S., I think it can become very overwhelming just to understand everything that may apply to your business or finding the right authority to contact, knowing when you should contact the county or a city or both.

And beyond licenses and transparency into that, there's that challenge with budget ownership. This comes back to transparency, where we have different teams taking care of different things. When we think about how everyone could possibly have a piece of the puzzle and it all comes together, it really does become daunting to know and understand who owns what part of the process and then also that financial obligation. When we have to include multiple people or businesses, it can really become difficult to navigate that decision process and also increase the time that it takes to implement solutions that can really solve a lot of these challenges.

So of course, if we're able to solve for these challenges or if we're not able to solve for some of these challenges, you can really face a lot of those consequences and ramifications and things like that.

So David, would you kind of help us understand what some of those impacts could be when it comes to annual reports?

David: Sure, absolutely. And so we talked about the fact that staying in good standing is sort of the most critical thing you can do in terms of managing your entities, and failure to do so has a number of consequences and none of them are positive. And so if you take a look at this slide here, really I think it can be a little bit of a progression, where maybe at first you miss your annual report filing. And then you find yourself in a status that is negative, such as dormant or delinquent. Eventually, you could get to the point where you are revoked. And so at that point, there's all sorts of problems, and a number of them are alluded to here on the slide.

I'll sort of add to this that getting back into good standing can be an expensive and time-consuming process in terms of dealing with taxes and penalties and interest. And then kind of in the interim, when you're not in good standing, it basically puts a freeze on any sort of transactions you might look to perform for that particular entity.

And then I think it's fair to say that revocation is really the worst possible outcome, where effectively you're no longer so to speak legally doing business with that entity, and you're really, at that point, losing the protections that the legal entity is set up to provide in the first place.

And so now that I've painted that doom and gloom picture, Calla, how would you sort of articulate some of the challenges from the licensing perspective if you're not staying in compliance from the license standpoint?

Calla: Sure, David. I think it might get a little bit more doom and gloom here on the licensing side as well. So the impacts are different and very equally as serious. We spoke a little bit earlier about the challenges. Not being in compliance with licenses can lead to delays in offering new or existing products. Very much like just falling out of good standing with the state, it definitely puts a halt on your operations.

This can lead to the inability to have even the opportunity for work, especially if you're in a trade organization where you're bidding on opportunities. If you're not licensed properly to meet a specific contract or something like that, whether it be with a state or a jurisdiction, you may be barred the opportunity to be awarded that job that you're seeking. So it is something that not being in good standing can have a lot of ramification for just being able to do business.

But further than that, it is the financial implication that comes from also not being able to perform the work, but in the way of fines or penalties and interest for not renewing a license, those penalties and lawsuits that come along with that.

Probably some of the most damages consequences that could have an outcome from not having the appropriate licenses and not managing them appropriately would just be the negative perception that consumers can have or form about your business, that negative press if it's reported that you have fallen out of good standing.

The actual closure of the business, again, as I said before, it could be that it's closed for a short period of time until you rectify that, or it could be indefinitely depending upon the financial implications. I know that I personally worked with a couple of clients that have expressed that there is nothing worse than getting that bright-colored sign on their brick-and-mortar location to shut them down for being out of compliance. So that's something that we really want to avoid.

Oddly enough, some arrests can happen. I know that's very, very severe. But a lot of licenses do require you to list a person that's either on-site or is your designated party to assume the responsibility of carrying out the compliance of those licenses really in the appropriate manner. So in very, very extreme cases, if that's not done and the licenses aren't being renewed, there could possibly be a warrant out for someone's arrest. Again, certainly a last resort, but these are all things that could possibly happen should there really be a lapse in license compliance.

David: With this, we're going to kind of move forward into another element of our webinar, which is talking about what we're calling the compliance life cycle and certainly talk about how that impacts annual filing obligations and license requirements as well. And so when we talk about the compliance life cycle, what we're really talking about are different sort of stages within the life cycle, for lack of a better term, of an entity.

So we'll start with sort of the beginning, the inception if you will, when you are forming entities or maybe acquiring entities. And then there is kind of the ongoing maintenance, where maybe you are again looking to keep companies in compliance in terms of annual report filings. Maybe you are looking to expand your organization, which is kind of the next part of the life cycle. Or maybe you're qualifying in new states. Again, maybe taking on more subsidiaries. And then certainly at the end of the life cycle would be kind of the winding-up, so to speak, of a subsidiary, or maybe you're looking to withdraw or dissolve an entity.

In all of these different sort of phases, if you think about from the beginning to the end of the life of an entity, they definitely impact annual reports and they impact licenses as well. So I'll talk to some of the annual report impacts, and then I think Calla will likely have some insights in terms of how some of these phases might impact the world of licenses.

But in terms of annual reports, I think the big thing we talked about is ensuring that you are in good standing. And as I'm sure a lot of folks on these calls know, a lot of times, when you're looking to do a transaction, you need a good standing certificate to validate that you are in fact in compliance in order to, for example, qualify in a new jurisdiction. You're going to need that good standing certificate in the jurisdiction where you're formed. If you're looking to kind of almost at the outset of an entity open a bank account or obtain a business loan, you're going to need a good standing certificate. And so again, sort of without the ability to prove, again, the good standing of the subsidiary, you're really kind of at a standstill with a number of those sort of critical items that you would look to form and during the course of a subsidiary.

And then in terms of the end state, dissolving, sometimes it's easier to get into a jurisdiction than it is to get out of a jurisdiction. And so, again, it's sort of proving the health of the subsidiary is also going to be a must-have in terms of being able to formally and effectively withdraw. And again, the failure to do that is in some cases there are entities that sort of linger and lapse, and then when you kind of maybe become aware of that situation, when you look to formally wind up and withdraw or dissolve, you realize again, oh, my gosh, we've got penalties. We've got interest. We've got to basically pay money just to true up, just to sort of get out of doing business in this particular jurisdiction, which can be really, really challenging.

And so that's how a lot of these different phases of the life cycle can be impacted by annual reports, with the failure to be on top of your annual reports.

I guess, Calla, any insights from a licensing standpoint that you would call out, that are critical?

Calla: Sure. I mean, I think from a licensing standpoint, we do have very similar implications when it comes to all of these areas, right? So forming entities, we want to help understand what kinds of licenses you need, and you have to go through that process of establishing them. Then maintaining is really everything that we've been talking about by understanding your expiration dates and keeping track of those to ensure the renewal of those licenses.

The expansion does also lend a little bit to the forming cycle, where then we have to say, "Okay, great. Where are we going, and what does that mean for us? Did we acquire a business? And did we acquire just their assets, or did we acquire everything and does that impact our licenses? Do we assume the role of the license holder from that previous organization? Or do we start fresh and treat them as new?"

A lot of things like that will come up. Also, again, just pure organic growth by opening new areas or moving into new areas includes adding new licenses and completing that research really all over again.

And dissolving is the same, right? Do you have all those different filings and things that you may need to do to withdraw from a state or dissolve the entity? But that really does apply to licenses as well. The same thing when you have back fees. A lot of licenses you're actually using calculations from the previous year. So if you did business in a given year and then you look to close out in that same year, there could be different penalties, not necessarily penalties, but fees that you have to pay to shut down that license appropriately. And if you're not, it does work very similar to maybe not dissolving an entity correctly and then trying to do business again in that state, same thing with a license. If you don't remove the license from record and shut it down correctly, that could cause some issues if you try to go back into that jurisdiction under the same or a different license.

So I think very much the same across the life cycle, just looking at it from a different perspective.

Now with that, we talked a lot about the life cycle, impacts, challenges, and all of that. But we really want to focus on those best practice measures that you can implement or CSC can help implement to ensure that you have a really smooth operation going.

So we've identified a lot of these as actual challenges throughout the session and how maybe not implementing them can impact the business. But we've gone through and identified together four best practice areas that are going to help assist throughout that life cycle and throughout filing annual reports and licenses. So we really want to dive into why these are important to instill in the day-to-day practices of the entity.

So the first one being, again we talked about this a lot, it's going to be transparency. And again, a lot of these are going to go hand-in-hand together. Another can be centralization, and we'll talk about all of these kind of together at the end.

Security, really, really huge today in the landscape. David was explaining the current landscape that we have, maybe highbred work models. All of this is going to play a big, big role in security. And then lastly, we really want to touch base on that knowledge. We've been talking about this a lot. How do you know, what do you know, and how does that really increase your efficiencies throughout the process?

So again, we talked about a lot of these today. They go hand-in-hand. But I do want to start with security and understanding that having your data and documents in a secure, protected area is really going to be key during this landscape, the changing landscape that we're in, really just in business and really in general.

In our world, we really do work with many pieces of data that are considered to be sensitive. They're not always just digital as well. They can be like hard copies of the data. And that's going to really have a big impact on our operations. Think about it. Now we have remote employees. Some of those employees may be taking some of these files home, or they have them somewhere else. And that workplace shift is really making this a little bit difficult. It's really exposing the risk or the risk of exposure to . . . The security that we have about our data not only from the entity, but in the licensing space, we deal with a lot of personal information, so it's personal data, like background checks or Social Security numbers.

And it's vitally important that all of this data, the documentation is not only safe and secure, but it's in a very known area, the transparency piece comes here, that you're able to trust and you know it's safe, secure, and protected. And that's when centralization and providing transparency to the organization and the people that need to access this data is so vital. There are really a lot of different levels of security that you can have within transparency and centralization, especially within CSC, because you want to have the ability to provide that access to the people that need it in a really easy way. But you also might want to be able to bar access to different places or to different items that maybe don't align with someone else's role that using that technology.

So this is really, again, something that is very easy to do. It's very achievable by implementing some of those systems that are really allowing for permission structures, ease-of-use, usability, and that security. So the three, security, centralization, and transparency are huge when working in this type of environment, and again, they really work hand-in-hand.

That knowledge and the overall understanding of information needed to file a lot of these transactions or filings or licenses is really also a very, very, very big thing. So having that knowledge or just knowing where to find it, whether it's in a database like this or you're using a partner like CSC, when you really think that these tasks in filings those items, it's going to ensure that you have all the correct tools to keep your operations in compliance and you're using your resources appropriately.

So we really talked a lot about definitions, processes, implications, and some best practices as well. But this does lead us to now how CSC can help and creating those best practices for you across some of the offerings we have today.

David, I think it might be time for us to walk them through how CSC can support the annual reports and licenses. Do you want to maybe start with the Navigator system we use?

David: Sure, absolutely. And so we've laid out a lot of kind of the challenges and we talked about best practices. And I think what you'll see is that a lot of what we have to offer addresses those things head on.

So I guess I'll start by saying that uniquely CSC is not just a service company or not just a technology company. We really pride ourselves on being unique in that we're able to bring both service and technology that blend together really seamlessly. And so kind of the goal of the part of the organization that Calla and I work in is that we really combine world-class service, compelling technology, and present clients with actionable data.

And so the technology platform is what we call CSCNavigator. And really what we think about it is a unified portfolio management system. So a portfolio could be a portfolio of entities, where you're trying to understand and manage when their annual reports are coming due. It could be a portfolio of licenses, where again the challenge is making sure that those renewals are happening in a timely fashion and you've got all the data needed to complete those renewals. It could be that you're dealing with litigation and service of process, where you've got a portfolio of legal matters that you're dealing with as a corporate legal department or as an organization.

So Navigator really is the platform that brings these things all together. So again, it's that centralization. It's that transparency. Calla was kind of alluding to this idea of making sure that, from a security standpoint, people only have access to the right information. And that is absolutely ingrained in terms of how we deliver this solution.

So as an example, if Calla and I were colleagues in a legal department and she was responsible for licenses, she could log in to the Navigator platform and have access to that data. But maybe I don't have that responsibility. So when I log in, the licensing area would be off-limits and in fact invisible to me. And then maybe on the flipside, I'm someone in our department that has responsibilities for entities and service of process in legal matters. And maybe Calla doesn't have, as a part of her job function, the need to deal with litigation and SOP, and, therefore, that part of the technology would not be something that would be accessible to her when she's working within the solution. So again, very granular in terms of making sure that users, down to the user level only have access to the resources that are relevant to that person's job function.

Then also we talked about knowledge as a best practice. And this is where when we get into the demo in just a little bit, I love to kind of geek out on the technology. But in terms of annual reports, this is where we have a real live knowledge base that understands when these filings are due. There's technology that automates the creation of the annual filing event in a calendar for your visibility. And so we'll kind of get into that in a little bit more detail.

But before we get into our technology demonstrations, which we love to do, let's talk for a moment just about the services themselves. And I'll start by describing what we call our annual reports preparation and filing service. And so we've kind of broken this service down into a couple of areas — pre-filing, filing, and then kind post-filing services. And so one of the challenges that we heard from I think close to 20% of the audience specifically as the number one challenge was just kind of understanding the current status of where we are in terms of our annual report filings.

And so the first thing that we do, when clients subscribe to this ongoing service, is that we do an audit just to understand the health and status of where you are from a filing perspective. And then we're going to provide visibility in terms of the filing reports that are coming due sort of in the near horizon so to speak.

And then the filing services themselves, it's really an outsource service, where our Annual Report team is preparing, filing reports, advancing fees, taking care of the payments of the filings. Now clearly this is a collaborative effort, right? So there's often circumstances where the Annual Report team has most of the information they need to complete the filing on your behalf, but there might be a few data elements that are not at our fingertips. So we would be working with you to gather that information so that we're filing effectively and in a timely fashion. And really being timely is critical. We don't want to have you scrambling to locate information. We ourselves don't want to be scrambling at the last moment. So were doing things proactively, well in advance to make sure that, again, everything is coming together in the proper time frame.

And then, in terms of post-filing services, this is where the technology really starts to come into play. But we have visibility in our Navigator platform so you can see the actual annual report filing evidence, so the document that comes back from the state. It's something that we notify you when it's available. We automatically link it to the underlying entity the filing was placed on behalf of in the technology. A good standing calendar, which lets you know what filings are coming due, actually has the status of the filing so you'll know when we're in the process of working on a filing and when it's complete. There is again not just transparency to what's coming due, but where our team is in the process of completing that filing on your behalf.

And then also, as an extra layer protection, sort of an extra safety net, we have a feature called our Corporate Tracker, which on an ongoing basis pulls in the current status at the secretary of state level. So don't just take our word for it that we completed the filing. We update that in the calendar. You get the supporting evidence document. But then in an ongoing fashion, we're routinely pulling in the current status from the state and then alerting you if in fact that status were to ever change. So there's a lot of sort of facets to this, but fundamentally this is where we can become a compliance partner and take this work off of your plate to maintain and really ensure your compliance at the secretary of state level on a going forward basis.

So with that as a backup of the annual report service, Calla, can you kind of take us through a little bit about the business license service offering?

Calla: Sure, absolutely. And I think a little bit of that is, like the annual reporting services, a lot of what we do in the licensing space with the outsourcing. So we have a couple of different sectors here at CSC when it comes to licenses.

Our first is going to be related to that research service and a lot of what we've been talking about with knowledge. We are able to provide solutions to help you understand what licenses you may need as you either move into new locations, as you see here, or you're currently working in those existing locations.

There is a difference. New locations really assume that you have not had any licenses yet, and CSC is just going out and understanding your business activities and the governing bodies for that location. You'd be in your location, and we're identifying the requirements that may be needed and providing a package for you to help you understand what you do from here.

Now with existing location research, it's a little bit of a similar scenario, where we identify the license requirements. But we are going to also help identify if you meet those requirements or not. A lot of the challenges that we hear about is understanding the transparency in the data. Some of you answered that, in the poll question earlier: What do you have? Where is it? What does your data look like? When are these things due? And a lot of the times you may not have that. You could have inherited this role from someone who left the organization, or maybe just recordkeeping really wasn't a thing.

So the existing location research is going to take that initial step further by verifying with those jurisdictions if you have the licenses that we've identified. If you do, great. We're going to help identify all of those data points that are vital and the active or inactive statuses of those licenses, alongside of filling in some gaps for you. Is there something that you might be missing, something that we can help shed some light on? So that is really that knowledge piece that CSC can provide to you.

We then have our full-service outsourcing model, which is very similar to the annual reports and does utilize that centralized CSCNavigator system, including our SOC 2 certificate and all of the security, unlimited user capabilities, allowing for if to be a collaborative workspace. But within this, CSC is going to provide a dedicated contact, an account manager who is helping manage your business licenses.

We are proactively managing the expiration dates to start that well in advance of the expiration. We also include obtaining applications, gathering together those documents, preparing the filings, that same type of thing of sending notices of the additional data points that we need, primarily things that would change year to year, like gross receipts or certificates of insurance, things like that. We are going to be submitting the licenses on your behalf, processing payments, and streamlining the way you approach cutting checks or getting approvals for these items.

And then that recordkeeping aspect, right, providing that centralized technology, providing you access to your records. Keeping not only copies of your applications that we submit, but your licenses, the physical license that is issued as evidence. And then alongside all of that data, we do also keep that historically and actively here.

But we do know, with all of that being said, that maybe outsourcing may not be a fit for everyone. So here at CSC we also have a self-management option, which is through our License Pro technology and self-service technology software. In this type of area, I know we haven't talked about it a lot today, and we're actually going to be demonstrating briefly, with one eye on the clock here, the outsourcing model. But just a quick note, the License Pro technology allows you, as an internal user, to have that centralized technology, to customize your workflows that best fit your organization, to structure alerts, items, again workflow steps, check requests, data collection, store copies, and everything you may need to make the license process work more simply and more efficient for you internally if maybe outsourcing is not an option.