As the legal landscape for American businesses changes under the new administration, business and legal departments of large corporations are increasingly turning to web-based entity management services to stay current with filing requirements. The right entity management service will support a company’s compliance with various state and federal laws as well as track pertinent aspects of the business life cycle, including historical information, securities ownership, and officers and directors.
Large corporations that own a number of different entities in different states, or even in the same states, often use a web-based entity management service to assist with compliance for ease of purpose: Each entity the corporation owns is often subject to different filing requirements in different states. This is where the entity management comes in, by assisting each business under the larger corporate umbrella with staying current with various fiduciary, regulatory, and statutory requirements for the business entity and directors, as well as providing advice to the corporation’s board, committees and management on these matters. Most states have different corporate filing requirements, with individual deadlines, which must be followed carefully for that entity to legally conduct business in that particular state.
An entity management service can also manage and maintain the enormous amount of data associated with these various compliance responsibilities. For example, a service can help manage which jurisdictions need which regulatory filings and when, as well as track and make readily accessible the documents the board of directors need before, during, and after meetings, such as minutes and corporate formation documents. The right management service can also manage legal names; track when the legal entity was formed, when and if it dissolved, where the entity operates, its subsidiary and parent information; and the names of registered agents designated to accept service of process. Furthermore, an entity management service can organize information about corporate structure and quickly produce reports that help with management, such as reports for the tax and finance departments.
Is it possible for a corporation to manage all of its business and legal requirements on its own? Probably. Is it the right business decision? Probably not. Indeed, the risks of not having streamlined entity management are many. For a start, failing to comply with filing requirements in each state means the entity may be banned from conducting business in that state. The entity’s inability to operate could affect other entities the corporation owns, causing a ripple effect in the corporation. A non-compliant entity could also be subject to fines and penalties from the state in which it is currently licensed, which could result in unexpected costs, as well as additional costs for legal counsel as they attempt to bring the entity into compliance before someone sues. An efficient entity management system, which can handle large volumes of documents and provide them in an easily accessible format, will likely save employee time and money and makes sense in this business climate.
For more information on Legalinc’s entity management services, contact us today.