Managing a portfolio of international entities can be a daunting task for multinational corporations especially when it comes to maintaining accurate core information about an entity. This may put heavy demands on the in-house legal or accounting team. For an entity to maintain its good standing status, several compliance requirements such as local regulatory, statutory, federal and state have to be met. This also ensures that the entity is able to conduct business without having to worry about the consequences of failing to manage entity information in an accurate and timely manner. These include penalties for late filings or being restricted from getting a loan financing. Managing foreign entities is obviously a complex affair hence it is important to utilize an Entity Management System to keep up with international entity management requirements.
Why Use an Entity Management System For Your International Entities
It is important to make use of a secure online entity management system to help you in the maintenance, tracking and reporting of information required to meet various compliance or closing deadlines. This enhances increased efficiency as well as cost savings. For all your business entities to remain in good standing with their respective state or business authorities, an entity management system will be required to track important information such as license renewal due dates and annual reports. Missing compliance deadlines or providing inaccurate information will lead to penalties and inability to conduct business in the affected jurisdiction.
In situations where the corporate secretary is required to provide information related to a particular entity such as a copies of charter documents or some basic organization documents, it will be easy to access such documents and information from the online entity management system. This ensures a prompt response to urgent requests as it will not be necessary to go to multiple sources to obtain this information.
All company departments should be able to access entity information on a daily basis hence the entity management system allows information to be accessed and updated 24/7. This further fosters visibility and transparency and also empowers staff around the world to co-operate and collaborate more efficiently. The ability to obtain accurate and current information/documentation is critical for any multinational company as it reduces the risk of non-compliance and also improves control of international entities.
Components of An Entity Management System
A lot of information/documentation is maintained and tracked through an entity management system which includes:
- Core entity information
- Compliance due dates
- Important entity documentation
Core entity information may include the exact legal name of your entities, jurisdiction of formation, dates of formation, mergers, amendments, termination/dissolution etc. It also includes the principal business address, the registered agent name as well as address, business purpose and the owner or manager information.
Compliance due dates may include franchise tax due dates, business renewal due dates as well as international compliance due dates depending on the country. Important entity documentation will include charter documents or the certificate of formation, limited partnership agreements, limited liability operating agreements, bylaws and initial organization consents. Other important entity documents include contracts and agreements as well as structure charts for illustrating company ownership.
THINK Online is a smart and secure online tool developed by Think Global Compliance (TGC) with the main aim of helping multinational corporations manage their international entities more efficiently through compliance, collaboration and communication. Contact us today for more information about THINK Online.