Entity management involves all of the documents and information that a company may accumulate on a day-to-day basis. The main goal of this type of management is to be able to track and view all of this pertinent information in an effort to remain compliant.
The right mix of technology and systems can help corporations effortlessly remain compliant so that they can continue to grow.
In short, a governance system is created that creates a strategic corporate records system.
Corporations are growing in complexity as the world’s economies continue to meld together. One corporation can have dozens of subsidiaries in states or countries that all have different compliance requirements.
The main reasons businesses focus on this type of management is because:
Regulations are the primary reason that entity management continues to grow. Therefore, organizations must monitor and remain compliant if they hope to continue growing without fines, penalties, or legal issues.
Legal entities and their management are a success when adaptability is a key focus of the business. A few of the many factors of entity management and how to properly manage entities include:
Furthermore, corporate entity management governance must be adhered to by all stakeholders in a business, management, and employees. Compliance relies on the proper systems in place and employees to follow these systems.
On a final note, governance and system requirements must adapt and change over time. Regulations, filings, and requirements to remain compliant can grow and change. Working with a business lawyer to respond to these changes is key for current and future entity management.
Legal professionals may not be required to put systems in place, but they’re often the most educated on proper entity management. In fact, paralegals and general counsel may assist with technology setup, but a lawyer is best suited for management.
Lawyers are needed when issues occur, and through your management system, it allows lawyers to access all of your business’s records from one central location. For example, if your business is spread across multiple southern states, it would be possible for your attorney to view:
Your lawyer can view all of these documents and more directly from the entity management system.
Corporate entity management grows in complexity as businesses grow and expand. Developing management systems and putting the right technology in place early on in a business’s operations reduces the risk of non-compliance and makes managing business growth easier.
Even if a corporation has an in-house legal team, entity management systems will reduce the team’s workload and provide more flexibility in the future.
If you need help with corporate entity management, our Houston business lawyers can help.
Schedule your free consultation right away to discuss corporate entity management and your business’s needs.
Your lawyer should work alongside your legal department to create the correct type of governance to make management as stress-free as possible. A few of the questions to ask your lawyer are:
Corporations should feel comfortable and confident when asking their lawyers questions. Be sure to ask questions as they arise to help make your corporation’s entity management as accurate and complete as possible.
Business lawyers have the education and expertise to assist corporations with corporate entity management.
In general, legal business entities will fall into one of four categories:
Corporations, limited liability companies and limited partnerships are the most common business types seen in entity management because they’re separate legal entities from their owner(s). The key benefit of these entities is that there’s a legal corporate veil that shields owners from legal liabilities in the company.
If a business remains compliant, the corporate veil remains intact and offers an exceptional barrier of protection to owners of the business.
However, if the business doesn’t remain compliant, there’s a chance that the veil can be pierced, meaning that the owners may be held liable in a lawsuit. When expanding to multiple jurisdictions or internationally, entity management is most powerful.
Remaining compliant across all businesses, even subsidiaries, is one of the best decisions a business can make.