Both for businesses seeking to expand internationally, as well as part of the wider complex business landscape, businesses must seek efficient legal entity management.
Regardless of business size or industry, whether a start-up or multinational corporation, compliance with various legislations and regulations is non-negotiable, and maintaining proper governance is crucial to a business’s ongoing success.
In this blog, we will explore what entity management is and some of the benefits it can add to your business.
What is entity management?
Entity management refers to the strategic management of a business’s legal entities, including corporations, limited liability companies (LLCs), partnerships, and subsidiaries, and oversees the lifecycle of those entities from formation to dissolution, if applicable.
Essentially, the goal of entity management is to ensure a business is compliant with local laws and regulations whilst maintaining accurate records.
What are the key aspects of entity management?
As part of entity management services, businesses can expect the following elements to be taken care of:
- Legal entity data and deadline tracking: This includes maintaining information on the company including the company name, its shareholders and directors, any registered addresses associated with the business, and any deadlines related to the shareholders mandates, registered addresses, etc.
- Annual compliance and corporate changes: This solely refers to the approval of financial statements and other significant corporate events, such as mergers and acquisitions and changes of directors, for example. Compliance, in this instance, refers to compliance with the internal governance system to ensure that no significant corporate event, such as the ones listed above, takes place without the proper approval and documentation.
- Data collection and documentation management: Properly organizing and managing business documents is an equally important part of entity management activity. This includes ensuring that all corporate events are properly documented and stored, and that they are readily available and accessible.
- Organizational chart and planning: Organizational charts outline the roles, responsibilities, and reporting lines of key personnel involved in legal entity management, such as directors, officers, compliance officers, and legal counsel. The chart helps ensure clarity and transparency in decision-making processes, making it easier to allocate tasks and responsibilities effectively. This ensures that the appropriate legal entities are in place and that the appropriate ownership is established.
How can entity management benefit your business?
There are various ways in which enlisting entity management solutions can positively impact a business. For example, business can take advantage of the following benefits as a result of harnessing entity management:
- Risk mitigation: By proactively ensuring entity compliance, following the internal and external governance, and making sure that all corporate events are properly approved, documented, communicated to the external parties and properly registered with the relevant authorities, businesses can operate efficiently and within the boundaries of the law. This means an organization’s reputation, financial well-being, and long-term sustainability are safeguarded.
- Growth: With the management of legal entity data and structures taken care of through entity management solutions, businesses will have more time to focus on other activities that can directly support business growth, such as marketing campaigns, hiring new talent, idea generation and strategic partnership management, to name a few.
- Strategy: As businesses are able to outsource entity compliance activities, such as ensuring events are properly documented and directors’ mandates are up to date, they can have more time and resource to apply to their business strategy. Whether a six-month strategy is required to achieve shorter term goals, or a twelve-month strategy is needed to support the long-term vision of the business, business owners and upper management will have more time available to focus on strategic goals.
- Expansion: For businesses looking to expand internationally, entity management is a must. Managing and maintaining entities can be overwhelming for businesses, especially on an international scale, but an entity management provider can take on these activities to facilitate seamless expansion. From drafting legal paperwork for business changes, such as bylaws and resolutions, to harmonizing entity management in the wake of rapid expansion, entity management solutions can directly support expansion into target markets.
Need help with entity management?
From maintaining entity compliance to streamlining operations and beginning a global expansion journey, effective entity management plays a key role in successful business, especially with continually evolving regulations and business environments.
HSP Group has an expert team of advisors, all of which have experience with providing entity management services for a variety of businesses in different industries.
Simply get in touch with us today to discuss your needs, and one of the team will be on hand to determine how best to approach your specific requirements with the perfect entity solution.