In today’s fast-paced business landscape, effective legal entity management is vital for organizational success. Many businesses struggle to navigate the complex landscape of legal entities as their operations grow, and they cannot keep up with the demands of compliance and administration. A 2021 EY survey, suggests that a staggering 89% of companies face challenges in managing their legal entities, while 87% of General Counsels report spending too much time on repetitive tasks.
Organizations can overcome such obstacles by opting for solutions that can automate tedious tasks and drive productivity such as legal entity management tools.
In this article, we’ll explore three compelling reasons why companies should consider using a legal entity management tool to streamline their legal entity management processes and enhance their overall productivity.
What is a legal entity management tool?
Before diving into the reasons to use such a solution, we must first define what it is. A legal entity management tool is a software solution that helps businesses manage their legal entities and subsidiaries. There can be two types of software, enterprise and SaaS, one has to be downloaded and the other is hosted online and can be accessed through the internet.
Each legal entity tool has its own features, but the function is to provide a centralized location for all entity-related data. This enables businesses to track information such as ownership structures, regulatory compliance and tax filings. Features can vary according to the service provider, some can offer document management, workflow automation and reporting.
Why use a legal entity management software?
Managing entities can be a complex task that involves multiple stakeholders as well as various regulatory requirements. Using software can help businesses streamline their processes, increase efficiency and reduce costs overall. Here are three main reasons why you need to use this tool.
1 – Centralize and secure your data
Loss of documents and a lack of follow-up on important information can be a common occurrence for organizations without a legal entity solution. Such faults can lead to potential compliance issues that could result in a greater vulnerability to cyber-attacks.
One of the main benefits of a legal entity management tool is the centralization of important entity-related data. Organizations can easily access and update information to provide real-time data that represents the business and its numerous entities, such as the distribution of capital. Security features on these tools such as access controls and audit trails can ensure that all data is protected from unauthorized access and only viewed by relevant stakeholders.
Using such a tool can therefore significantly reduce security risks.
2- Increase efficiency with traceability
Efficiency is key to all areas of a business, and legal entity management is no exception. Managing entities involves many stakeholders, such as legal teams, accounting and business units, it is therefore essential to ensure smooth collaboration for all. A lack of proper communication can lead to entity-related tasks becoming drawn out and mistake-prone.
A legal entity solution can solve these challenges by providing traceability and transparency into all related tasks. Features like file-sharing, document histories and alerts for end-of mandates or contract deadlines can help businesses streamline their entity-related processes, reducing the risk of errors and delays. Some legal entity tools also include reporting and analytical features to better track all areas of business of an organization and identify areas for improvement.
Traceability also simplifies organizations’ specific needs for audits.
3- View your organization and its entities
The ability to view an organization and its entities, and understand its structure can clarify legal, tax and regulatory requirements and improve compliance. A legal entity tool can help provide a holistic view of a business and its entities by mapping the distribution of voting rights and capital, among other things. This helps businesses easily understand their organization’s structure.
By tracking ownership structures and monitoring compliance requirements an entity management tool can help companies streamline their entity-related processes, improving efficiency and reducing the amount of time and resources previously spent on these. Furthermore, some solutions have embedded reporting features that can further help organizations optimize procedures and areas of development.
An overview of all business areas means that organizations have more control over all operations and save money in the long run by avoiding compliance-related fines and penalties.
By investing in a legal entity management tool, businesses can ensure that their entity-related processes are streamlined, efficient, and compliant.
Why is DiliTrust’s Entities module the best solution for you?
Legal entity management is a complex task that requires proper tools to keep up with current demands. The DiliTrust Governance Suite’s Entities module is custom-made to provide a centralized place for all entity-related data while increasing efficiency with traceability. A clearer overview of all entities helps gain efficiency and productivity for all stakeholders involved.
Our SaaS solution, which can be accessed around the world at any time, secures your documents reducing security risks and unauthorized accesses. In fact, DiliTrust is ISO 27001 and 27701 certified, the best standards for information security management. We are committed to delivering the best customer experience with our 24-hour multilingual support and access to unlimited training with our Customer Success team.
Are you interested in our Entities module and would like to learn more about it and the DiliTrust Governance Suite?
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