Amid constantly changing rules and regulations, the last thing you need is staff bogged down with compliance and corporate secretarial tasks. Rogier Bronk, Head of Global Entity Solutions, Americas, and Jonathan Scrocchi, Head of Mid-Atlantic and Mid-Western Region, Americas, explain how corporate outsourcing frees your team to focus on the areas of the business where they add most value.
Many corporate legal departments struggle to stay abreast of the regulation in local jurisdictions that impacts their global entity portfolio, while also managing other corporate legal matters with set deadlines across multiple time zones.
In the past, corporations have been reluctant to outsource legal tasks, preferring to develop in-house teams and technology with the goal of enhancing and making legal administrative work more efficient. But as a downsized, dispersed workforce struggled to cope with complex regulations, increased workload as well as changing work environment and processes, outsourcing has once again become a hot topic over the last few years.
Even before Covid-19, the legal departments of multinational companies had begun to modernise their workflows and systems by implementing new software. This change has accelerated, forcing service providers to also adapt and refine their solutions for software technology provision and system management.
From a jurisdictional and regulatory standpoint, many commercial registries and governmental institutions have shifted towards electronic filing and other modernised processes.
Process upgrades as well as the overhaul of companies’ legal administrative tasks have shrunk headcount and investments in technology.
From a regulatory and administrative workload perspective, countries across the globe have become more demanding and stringent. For example, the Know Your Customer (KYC) paperwork requirements have increased. In addition, many countries are adopting and implementing the requirement to register Ultimate Beneficial Owners (UBOs) to prevent financial and economic crimes such as money laundering, financing terrorism, tax fraud and corruption. This has increased the load and expanded the list of tasks needed to be compliant.
Thankfully, a new breed of one-stop-shops has emerged, providing the exact service that overworked corporate legal departments need.
What do these changes mean for multinational legal departments?
Many legal departments are short-staffed and are forced to depend on third-party vendors and local partners in order to keep up with new laws and regulations.
While local jurisdiction mandates are vitally important and need to be properly maintained in order to keep entities in good standing, the administration involved in meeting such obligations is time consuming. This not only increases the workload but also requires specialist knowledge to meet the standards of many and varied jurisdictions.
Multinational companies are facing a variety of regulatory risks when operating in different geographies and countries, while struggling with a reduced headcount. From a legal standpoint, when corporate changes take place – such as director changes, changing company names, changing entity type, among other things – then documents need to be submitted and updated accordingly to reflect the changes in the commercial registries.
Failure to keep entities in good legal standing and reflecting updated records can result in legal fees and penalties. It can also impact and delay M&A transactions or lead to inaccurate regulatory reporting, in addition to limiting the execution of other common day-to-day corporate actions. The number of consequences can be extensive.
Increasing regulation requires specialist knowledge
Each country is different. If a legal department is trying to centralise paperwork, staff need to understand all the processes involved. For example – depending on the jurisdiction – the incorporation documents, provision and filing of KYC documents as well as UBO registry can be different from one country to the next.
Requirements such as the number of board meetings to be held and the filing of board minutes and resolutions vary in their number and recording manner. These examples of corporate governance requirements and regulations across the globe makes corporate legal work cumbersome while demanding expertise.
Why corporate outsourcing could be a smart move
The impetus to outsource corporate secretarial work is driven by the need for managers to simplify their processes and look for cost-effective solutions.
As the industry changes and evolves, technology is playing a greater role in managing risk and analysing data. However, the cost of keeping up to date – constantly investing in and upgrading IT systems to account for legal and regulatory changes – can be prohibitive.
One solution is to outsource these functions to a global third-party provider, enabling your legal department to benefit from the expertise and economies of scale that their staff and operating frameworks can bring. Clients are increasingly on the lookout for a trusted global specialist to help them navigate the complex legal business and regulatory environment in which they operate.
Until now, one of the limiting factors has been the scarcity of modern and robust service providers. However, one-stop shops are now emerging. These providers offer the knowledge, services and data management that clients need, while adhering to the higher standards of quality and customer service they expect. These specialists relentlessly re-evaluate their service offerings and invest in their processes as well as technology to stay ahead of the game to provide clients with the expertise and solutions they need.
How Intertrust can help you
- Our team of more than 4,000 experts around the globe are on hand to help your legal department run smoother, so you can concentrate on your core business.
- Our Global Entity Solutions department provides a broad menu of corporate secretarial services. We are experienced in maintaining entities within global portfolios and cover more than 150 jurisdictions. We also give guidance on continuously changing local mandates and corporate secretarial requirements.
- Using up-to-date technology, we provide support to streamline, standardise and facilitate the administrative workload, customising our service to fit your internal legal structure.
- At Intertrust Group we tirelessly develop a framework to satisfy market demand and stand out from our competitors.
- We are equipped with the talent, technology and expertise you need from a one-stop solution.
Visit our website and get in touch for more information and talk to our expert team today
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