The Best Ways To Utilize Legal Management
Over time, it’s usual for businesses to become more and more complex in structure, which in turn, poses many new management challenges. Regulatory compliance and business goals must be met, while risk must be appropriately assessed and managed.
Businesses need to be aware of problems which may occur as a result of a financial crisis, increased regulatory burdens or even the requirement for tighter data security.
Global companies need to take into consideration Variable Corporation tax around the world. In fact companies might be able to take advantage of incentives such as creating their own subsidiaries in areas with lower taxation.
Setting up effective and efficient legal management can be time-consuming, but it’s definitely worth the investment. Future mistakes are less likely to happen and business goals can usually be better achieved.
The Five Most Important Things To Consider For Legal Entity Management
1. Record-Keeping, Regulatory Filings and Centralised Compliance
Decentralisation is often associated with disorganisation and missing regulatory filing deadlines. Compliance information needs to be stored in one central repository so that all outstanding tasks are easier to manage, and all tools needed to execute different business functions are readily available.
2. Supporting Directors in their Tasks
Directors need to have the right skill set and areas of expertise to help the business remain competitive and avoid potential conflicts of interest. However, because different standards are applied to different jurisdictions for entities, this can greatly complicate things.
When entities are created, they will need to satisfy all regulations regarding director independence, or restrictions in the number of possible directorships. Director training may be required surrounding governance, responsibilities and conflict. Directors also need to fulfil ongoing communications with staff, shareholders and other directors so they can achieve their ongoing obligations.
3. Creation of a Subsidiary Governance Framework
Considering that many organisations have multiple subsidiaries worldwide, a framework needs to exist for all users within an organization, so that information can be accessed no matter where they are based at. If users need access to specific information, this should be authorised quickly, but the access level should be correctly set.
When new systems and processes are being established, it’s essential to set clear goals while communicating them to all staff and stakeholders. All supporting documentation should also be gathered at this point. Similarly, all board members and corporate secretaries must be committed to the training and adoption of new systems and processes.
4. Using Technology to Enable Better Compliance
While the right kind of technology can help make things easier, particularly with regards to subsidiary management, it can result in utter chaos if not used correctly. If you’re in the process of swapping over from your current legal entity management platform, don’t just sign up with a vendor straight away without first considering all your ‘wants’ and ‘needs’.
If you’re not entirely sure what you’re looking for, an excellent place to start is a system that can meet all your governance, compliance and record-keeping needs so you can meet various different entities.
Always take in to consideration the integration feasibility, so that the technology you choose works well with your legacy systems. You’ll also need to have appropriate information about installation, upgrades and ongoing support, to help minimise any kind of risk to your business.
Sit down with important stakeholders to discuss functionality. Specifically, what features you must have in the new legal entity management software, and what would be nice to have. Once you start looking at vendors, prioritise the ones who are willing to get to know your organization, your goals and your needs.
5. Empowering the Corporate Secretary
The corporate secretary lies at the heart of governance, compliance and corporate management. The role is becoming increasingly varied, completing tasks such as managing agendas, data reporting, presenting and follow up, assisting with stakeholder communications and board development, helping the chairman and assisting with different governance matters. Proactive secretaries are an asset to any organization, helping them stay ahead of their competition and ensuring they can deal with new compliance problems and regulations as they occur.
Parting Words On Legal Entity Management
The process of managing different entities within an organization can be challenging. However, legal management can be worth the investment, particularly for global complex organisations, as it enables them to run more effectively. When a company adopts processes and best practices for legal entity management, they are more likely to enjoy continued success.
