What this is: Entity management is the practice of keeping an organization's core vital entity information in a system that serves as a single source of truth to manage ownership, management, formation, governance, compliance and other critical matters.
What this means: Strong protocols and best practices on how the core vital entity information is managed for your organization by using an entity management system will support key governance and compliance requirements during the lifecycle of your companies.
The Importance of Managing Entity Information
The lifecycle of a company has several stages: Formation, compliance/maintenance while conducting business, potential reorganization (including merger or conversion) and finally, when winding down, termination or dissolution when the business is no longer active and the termination of the legal existence in the domestic and foreign jurisdictions is required.
During the stage when a business entity is active and conducting business, it is important that all federal, state and local regulatory, statutory and administrative compliance requirements are met. The consequences of not managing this information in a timely and accurate way can range from payments of penalties and interest for late filings and tax payments to being restricted or delayed from closing on a loan financing.
Partnering with the registered agent for the company and gaining access to their entity management systems can drastically reduce the amount of time needed to keep up with business entity maintenance requirements and, as long as core entity data and documents are included in the entity management system, serve as a replacement or supplement to housing important entity data and documents in formats and on locations that are not available to key stakeholders at your company.
Fortunately, partnering with the registered agent for the companies and gaining access to their entity management systems can drastically reduce the amount of time needed to keep up with business entity maintenance requirements and, as long as core entity data and documents are included in the entity management system, serve as a replacement to housing important entity data and documents in an entity management system. Also, when the features of an entity management system are used more robustly, it can serve as a single source of truth for key entity data and resource for current important governance documents.
If you’d like to work with a team that can handle your corporate filings, corporate dissolutions and more, head on over to our Corporate Services page.
What is Typically Stored in an Entity Management System?
Below is an overview of the types of information maintained and tracked, as well as a sampling of some important documentation stored for easy access within online entity management systems.
Core Entity Information
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Exact legal name of entities
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Jurisdiction of formation and where qualified/authorized to conduct business
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Dates of formation, amendments, mergers or dissolution/termination
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Federal, state and local ID numbers
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Principal business address
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Registered agent name and address
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Business purpose
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Owner and manager information
Compliance Due Dates
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Federal and state income and franchise tax due dates along with event notification and ability to run on-demand reports of upcoming due dates
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Business license renewal dates
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International compliance due dates (i.e., date of filing of Annual General Meeting for Hong Kong business entity)
Important Entity Documents
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Charter documents (i.e., Certificate of Incorporation or Formation and all amendments date-stamped by State of Delaware)
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Bylaws, limited liability operating agreements, limited partnership agreements
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Incorporator Actions, if applicable
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Initial organization consents/meeting minutes
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Annual meeting minutes/consents
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Periodic minutes/consents authorizing specific entity actions
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Contracts/agreements
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Legal proceedings served on the company (i.e., copies of Summons and Complaints along with related answers and court documents per case; typically accessible by a limited number of people within the company)
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Structure charts illustrating ownership
It is increasingly a best practice for in-house legal teams and for several law firms who manage compliance and governance for their clients to identify and leverage an entity management system (such as Cogency Global's secure, online global entity management system, Entity Central®) that is provided by the registered agent named in companies they form or are qualified to do business in another state.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.
