Embark on a Journey to Entity Management Excellence in 2024
With the Corporate Transparency Act (CTA) set to take effect on January 1, 2024, now is the time for organizations to take a cold, hard look at the way they manage their entities. Maintaining legal compliance has always been important, but the Act raises the stakes: reporting companies may be fined up to $10,000, or even face criminal penalties, for willful non-compliance.
With so much on the line, having a blasé approach to legal compliance will no longer cut it (not that it ever should have…). Too much is at stake. Playing fast and loose with entities will sink your organization into deep, hot water.
The good news is this: you have two months before the Act takes effect, so there’s time to evaluate and update your organization’s approach to entity management. Even if you think the process you use to maintain legal compliance is “good enough,” use this moment as an opportunity to ensure it is airtight.
So… if you want to begin 2024 on the right foot, start here. Implementing a solution that buttons up your entity management process is the best way to set yourself – and your organization – up for success in the new year.
Get on the Path to Foolproof Entity Management
Entity management efficacy exists on a spectrum: some approaches are woefully inadequate, and others are so effectual that worries over maintaining legal compliance are a thing of the past. Most processes fall somewhere in the middle.
Every organization should strive to fall on the “so effectual we don’t even think about entity management” side of the spectrum. Luckily, getting there is an (easily!) achievable goal – just follow the steps below.
Step 1: Determine Whether Your Organization has an Entity Compliance Problem
The number one indicator that your organization has an entity management problem? Fines. Fines, fees and interest associated with non-compliance are 100% avoidable – if you have the right process in place. If your organization ever has to shell out money to get its entities back into good standing – no matter how infrequently – it is a clear indication that entities can (and should) be better managed.
Many organizations that struggle with frequent fines rely on a manual process to manage their entities. When entities are managed manually (usually with a spreadsheet and calendar reminders) entities are almost destined to fall out of compliance. If your organization has more than about 20 entities, a manual approach all but ensures something will slip through the cracks. Spreadsheets and reminders just aren’t advanced, transparent or collaborative enough to keep your entities in good standing.
Manual processes also fail to deliver reliable audit trails, which are essential because they:
- Allow you to spot and correct errors and inconsistencies quickly
- Give you a reliable account of action taken on entities
- Facilitate internal and external audit processes
- Streamline personnel changes
If your organization lacks an audit trail, works off a spreadsheet, receives constant fines – or just can’t confidently say it is 100% in compliance – it’s time for a change.
Step 2: Survey Your Entity Management Options
As established, manual entity management processes just can’t keep a majority of organizations compliant. Some organizations that manually manage entities do so in-house, and others outsource to a registered agent (RA).
Many people are under the (unfortunately mistaken) impression that RAs follow an effective, proprietary process that allows them to expertly manage entities. But, if you’ve ever worked with an RA, you probably have a strong sense that isn’t the case. And you are correct: most RAs use similar methods you would employ in-house… and they bill you for it.
A number of generalist legal software providers rushed to fill in the gaps left by manual entity management practices. Unfortunately, many of the best-known offerings on the market may look polished, but still rely on a manual backend – the onus is on you to get the work done.
That’s not to say effective software solutions don’t exist, because they certainly do. Look for one that truly automates entity management (and doesn’t just send “automated” reminders) – but also provides concierge-level service for any work that still requires a human touch.
As you narrow down on the right solution for your organization, ask providers the following questions:
- Is your solution automated? Will your team handle any work that can’t be automated?
- Will I have visibility into the status of my entities and the work that’s been done?
- Can I invite collaborators and stakeholders to view some or all of my entities?
- Will your solution help me gain a competitive advantage by eliminating the threat of legal non-compliance?
If they answer “yes” to all of those questions, you are on the right track.
Step 3: Implement the Solution that Handles Legal Compliance for You
We’ve said it before and will say it again: legal non-compliance is 100% avoidable.
If you, like many others, have been chronically underserved when it comes to entity management, avoiding non-compliance may seem like a pipe dream – but it’s not. How do we know? Because Filejet has helped countless organizations reclaim control over their entities and make worries over legal compliance a thing of the past.
Filejet’s unique combination of service and software automates U.S. and international annual report, business registration, and DBA filings. Anything that can’t be automated, is handled by the Filejet team who does whatever it takes to ensure you never fall out of compliance.
I’m Ready to Try Filejet… What can I Expect?
When you onboard with Filejet, your relationship with entity management will transform. Once you are on the Filejet platform, your organization will have an entity management process it can all but forget about while still being 100% legally compliant, 100% of the time.
No matter where you are in your entity management journey, we understand that changing up a process that seemingly serves you well enough may be daunting. You – and members of your decision-making committee – likely still have a lot of questions. We recommend you and your team take a look at our FAQ page: whether you are looking to change up your entity management approach, or have questions about Filejet’s capabilities or onboarding process, we have answers to guide you.