Entity Management Software in 2023: The Year of Automation & Visibility
Legal entity management software allows businesses to streamline and automate entity compliance with state and local government agencies for annual report filing, business license renewals, officer updates, and other compliance minutiae that bog down corporate counsels, finance and accounting departments, and business owners.
Ineffective entity management software and registered agent services lead to inefficiency, non-compliance, fines, and dissolution of business entities. Below is a review of entity compliance developments in 2022 and what is expected for 2023.
A 2022 Review of Entity Compliance
There is a growing trend in legal entity management of automation and transparency. This is due primarily to a lack of time to manually ensure entity compliance and an increasing number of compliance requirements to satisfy as organizations grow.
Entity Management Automation
There has been increased awareness around legal entity management recently, as more general counsels and their teams realize that not all of their entities are compliant—or even known—especially when they get nastigrams from secretaries of state and other government officials.
This is particularly galling considering that registered agents are paid hefty fees to ensure entity compliance. As a result, many registered agent customers find themselves facing fines, penalties with interest, and entities facing dissolution.
Why does this happen? Because registered agents lack their own entity compliance software – they track your entities and file manually.
Recently, software has been developed that claims to automate entity compliance but instead just alerts you to file (manually).
Increasing Demand for Entity Management
As businesses grow and regulatory requirements increase, the demand for entity management software that automatically files your documents and provides visibility into all of your entities and compliance status is also rising.
By having a single source of truth for entity compliance information, businesses can avoid the costly mistakes that can come from filing manually, whether doing so internally with Excel or so-called entity compliance automation software, or externally with a registered agent. Truly automated entity compliance software will free up time and resources to work on contracts and other high-priority tasks.
Expected Entity Management System Developments in 2023
Growing Entity Management Tasks
In 2023, the definition of entity management is predicted to become broader. Businesses will consider closely adjacent compliance tasks, like business license renewals, amendments, restatements, S corp elections, cap table management, and more to fall under the entity compliance umbrella.
Incorporating Advanced Technology
Gone will be the days of relying on spreadsheets and calendar reminders to keep track of entity compliance. Instead, businesses will leverage entity management software that provide automated filing and real-time visibility into compliance status for all of your entities.
Automating filing and other tasks associated with entity compliance and not having to hunt down entities and their compliance status, frees up valuable time for in-house legal teams, accounting and finance departments, and business owners.
Filejet in 2023: Consistently Innovative
Filejet entity compliance software includes features that automate compliance tasks with a managed service option that streamlines onboarding, ongoing communication, and other parts of the process that cannot be fully automated.
Our goal is to make Filejet consistently innovative and efficient for automating more compliance-related tasks and fully managing the entity life cycle from formation to dissolution. With new updates scheduled throughout the year, Filejet remains at the forefront of compliance automation technology.
Speak to an entity compliance expert to learn more about how Filejet can help you streamline your compliance processes.