Entity management can be an overwhelming task, especially when international borders are involved. A central task for legal departments is to manage the flow of information associated with the acquisition and dissolution. For each entity, the legal department has to deal with several dozen unique data points, which highlights the need for rapid access to information. The text below covers some common myths to transform entity management from a time-consuming task to time well spent.
Myth 1: I won’t be able to track my company’s legal ownership.
Quite the opposite. As the complexity required to manage entity compliance increases, transparency is vital. Whereas you have to sort through paper to find the ownership at a point in time, cloud-based entity management tools put important data at your fingertips. These tools enable legal departments to track the corporate lifecycle activity and manage documents for reporting insights.
Myth 2: The tool doesn’t fit my organization’s needs.
Smaller organizations may have a more difficult time managing their entities, because they’re likely to have limited resources compared to their larger counterparts. However, regulations apply to organizations regardless of their size, so it’s important for organizations to develop – and stick with – a strategy that helps them manage their entities.
Myth 3: I won’t be able to gain insights into my data.
Flexible reports and other management tools allow you to important management insights. One powerful tool provided by cloud-based entity management tools is the ability to create org charts. This helps you to visualize the structure and ownership of your legal entities, by providing transparency of legal ownership within an organization from entity creation to dissolution.
Myth 4: I simply need to manage my records better.
The transition to the digital age has left organizations clueless about how to handle the flow of incoming and outgoing information. Paper processes and spreadsheets don’t help legal departments minimize their risks and optimize the value of the information. In contrast, cloud-based entity management increases visibility by ensuring that your information is available anywhere, anytime.
Myth 5: I can keep using paper processes, I just need more storage.
This won’t be the best option in the long-term, especially if your organization has plans to expand. Utilizing paper process only makes it more difficult to track ownership and changes to your legal entities over time. Paper-intensive processes put strain on an organization’s resources, because they decrease productivity – the time it takes to retrieve a file is much longer, if it already hasn’t been disposed of.
Cloud-based entity management tools aim to increase transparency by bringing information about entities together from across the organization. With rapid access to real-time information, effective entity management can help legal departments to maximize their efficiency and accuracy.