Corporify Blog

Managing group entities: do you need a legal entity management platform?

Written by Olivier Van Borsel | Dec 06, 2024

Ask yourself these 5 practical questions.

  1. Is all information about your group entities mainted and stored correctly?

  2. Do you know which persons can access legal company documents?

  3. Can you quickly create a correct list of all the current and past directorships?

  4. Is your current group org chart 100% up-to-date?

  5. Are all the share registers of the group completed and are you ‘due diligence ready’?

If you answer was ‘no’ more than 2 times, we recommend to continue reading. In such case, a ‘Legal Entity Management Platform’ is definitely something for you to consider.

 

1. What is it?

A Legal Entity Management Platform enables companies and organizations to efficiently manage all their legal entities (holdings, operational companies, SPVs, subsidiaries and branches).

Moreover, it generates detailed overviews of ownership structures, voting rights and governance bodies. As such, it relieves you and your legal advisors from tedious and time consuming administrative work.

A cloud based Legal Entity Management platform is flexible as to support almost any type of organization. Such a solution trumps Excel or other spreadsheets, making legal entity management software an indispensable tool for modern businesses.

Tailoring the platform to align with your organization's unique business strategy ensures that it meets specific strategic goals.

 

Definition and Scope of Entity Management

Entity management refers to the comprehensive process of overseeing a business’s legal entities, which can include corporations, limited liability companies (LLCs), partnerships, and subsidiaries.

This process encompasses the entire lifecycle of an entity, from its formation to its dissolution, if applicable. Effective entity management involves maintaining accurate records, ensuring compliance with local laws and regulations, and managing the relationships and interactions between various entities.

By implementing robust entity management practices, businesses can ensure that their legal entities are well-organized, compliant, and strategically aligned with their overall business goals.

 

2. What are the benefits?

The following core functionalities are essential to a Legal Entity Management Platform:

  • All basic information and core documents of all group entities are centrally stored.
  • All directorships are kept up to date.
  • The platform administers all participations (both those of the mother entities and the subsidiaries). 
  • Legally required share registers are managed fully digital. At any moment, you can export and print copies of the entire register or of individual certificates. 
  • Automatic creation of visual org charts of the group structures, detailed according to your own wishes.
  • The platform automatically generates all legal documents in the framework of the annual general meeting or during specific ad hoc changes (capital increase, change of directors, etc.).
  • Integrations with the mostly used and common e-signing providers.
  • You determine which stakeholders get online access to certain information. 
  • Shortcuts to the relevant enterprise registers.
  • Robust security through adequate ISO-certification, multifactor-authentication and advanced user permissions. 

Importance of Legal Entity Management

Legal entity management is a cornerstone for businesses aiming to expand internationally or navigate the intricate business landscape.

Compliance with various legislations and regulations is non-negotiable for businesses of all sizes and industries. Proper governance is essential for a business’s ongoing success, and entity management plays a critical role in ensuring that a business is compliant and organized.

By implementing effective entity management practices, businesses can reduce the risk of fines and penalties, streamline operations, and gain a competitive advantage in the market. This safeguards the business and enhances its reputation and operational efficiency.

 

3. Who offers it? 

Corporify is one of the most known market players in the space of legal entity management and digital share registers. We offer a unique data-driven approach. From ‘single source of truth’, over document generation to communication via an encrypted and secured portal.We serve already more than 100 enthusiast customers locally and internationally.

Our support team provides a clear and pragmatic onboarding, shares best practices, offers updates and answers all of your practical questions. 

 

4. What does it cost?

The many benefits of transitioning to a modern software platform for entity management and corporate housekeeping definitely outweigh the investment cost. The fees are based on the number of users and the number of legal entities managed in the tool. Prices start from € 8,000 per year. 

 

5. Challenges of managing multiple Entities

Managing multiple entities can be a complex and time-consuming task, especially for businesses with a large number of subsidiaries or entities operating in different jurisdictions. Some of the challenges of managing multiple entities include:

  • Ensuring compliance with local laws and regulations

  • Maintaining accurate records and entity data

  • Overseeing the relationships and interactions between entities

  • Managing entity relationships and interactions with third-party vendors and partners

  • Ensuring that all entities are properly registered and licensed

These challenges highlight the need for effective entity management solutions that can streamline processes and ensure that all entities are managed efficiently and compliantly.

 

6. Jurisdictions and compliance

Jurisdictions and compliance are critical components of entity management. Businesses must ensure they comply with local laws and regulations in each jurisdiction. This includes registering and licensing entities, maintaining accurate records, and filing required reports and documents.

Entity management software can help businesses streamline compliance processes and meet all regulatory requirements. By leveraging such software, companies can reduce non-compliance risk and ensure that their operations align with local legal standards.

 

7. Ownership tracking and org charts

Ownership tracking and org charts are also essential components of entity management. Businesses must maintain accurate entity ownership and organizational structure records, including org charts and ownership diagrams. This information is critical for ensuring compliance with regulatory requirements and for making informed business decisions.

Entity management software can help businesses track ownership and organizational structures and generate org charts and other reports as needed. Businesses can use such tools to ensure that their corporate data is accurate, up-to-date, and readily accessible for decision-making and compliance purposes.