Table of contents:
1. What is a legal entity?
2. Legal entity management challenges
3. Traditional management tools and their limitations
4. Modern legal entity management solutions
5. Shareholder register compliance
6. Best practices for legal entity management
7. Conclusion
A legal entity is the foundation of modern business. It means a company or organisation that is recognised by law as having its own set of legal rights and responsibilities, just like a person. This fundamental concept allows businesses to operate with legal certainty and protection.
A legal entity can:
• Enter into contracts independently
• Own business property and assets
• Earn profits and pay taxes
• Sue or be sued in its own name
• Incur debts and legal obligations
This separation between the entity and its owners creates what’s known as the “corporate veil” – a legal distinction that protects personal assets from business liabilities, depending on the entity structure chosen.
Managing legal entities efficiently is a challenge for legal departments and advisors as organisations grow and expand internationally. These 5 challenges often occur.
As organisations expand domestically or internationally they often create multiple entities, each with different requirements:
• Governance structures outlining decision-making protocols and responsibilities
• Reporting requirements, including regulatory disclosures and operational updates
• Annual filings such as UBO filings, tax returns and financial statements
Managing these responsibilities across 10 or more entities can quickly become overwhelming without proper systems in place.
Companies with fragmented ownership face additional hurdles:
• Tracking shareholder changes and maintaining accurate records
• Ensuring proper documentation for dividends and voting rights
• Maintaining “due diligence ready” documentation
• Managing communication with hundreds of shareholders
Some organisations manage only one legal entity but have over 850 shareholders, requiring robust systems to maintain accuracy and stakeholder trust.
Each legal entity generates a lot of documentation:
• Articles of incorporation and bylaws
• Board resolutions and meeting minutes
• Annual reports and compliance filings
• Share certificates and transfer documents
• Tax filings and regulatory submissions
Traditional document management through Excel spreadsheets or SharePoint often leads to inefficiencies, version control issues and difficulty retrieving critical files when needed.
Compliance requirements vary by jurisdiction and can lead to significant penalties if not properly managed:
In Belgium for example:
• Ultimate Beneficial Ownership (UBO) information must be filed
• Financial accounts must be submitted annually
• Updated governance records must be maintained
• Shareholder registers must be kept current
For multinational corporations these requirements multiply across jurisdictions, creating complex compliance matrices that need to be coordinated.
Multinational organisations often allow local offices to manage compliance independently, leading to:
• Inconsistent standards across regions
• Missing critical deadlines in certain jurisdictions
• Reduced central oversight and visibility
• Increased risk exposure for the entire organisation
Legal departments have traditionally used common business tools for entity management but these solutions often don’t meet the specific legal requirements
Both Excel and SharePoint are useful for general business purposes but lack the specific features to manage legal entities. They can’t handle sensitive legal documents, ownership information, voting percentages or regulatory compliance in an integrated way.
Excel is widely used for entity management. It is possible to manage legal entity using Excel. However, its shortcomings become evident as complexity increases.
Advantages
• Immediate accessibility and familiarity
• Flexibility for customisation
• Cost effective initial setup
1. Data entry vulnerabilities: Excel’s open format increases the risk of user errors that can have serious financial and operational consequences.
2. Version control difficulties: Updating multiple spreadsheet versions becomes overwhelming with complex user permission management adding to administrative burden.
3. Collaboration complications: While Excel allows simultaneous editing, tracking all changes becomes impossible without built-in version control.
4. Limited reporting capabilities: Excel can’t generate reports for specific points in time, requiring manual logging and creating scattered data across multiple systems.
5. Security concerns: Standard Excel security features are limited, creating risk for sensitive corporate data and client information.
SharePoint is a standard document management solution, but legal departments often find:
SharePoint stores legal documents, share registers and board communications, but can’t analyse legal matters deeper and can’t create entity structures visualisation.
SharePoint allows folder structures and naming conventions, but creating effective legal document libraries is time-consuming and complex. The user experience is not intuitive and requires extensive training and IT support.
SharePoint enables document sharing across departments, but customising access for different stakeholders (CFOs, external auditors) requires creating separate folders, duplicating documents and managing manual sharing tasks.
The true cost of SharePoint for legal entity management goes beyond subscription fees. The costs for ongoing maintenance, customization development and continuous consultation with IT professional all adds up.
SharePoint requires manual processes to update shareholder information. This lack of workflow automation creates time consuming, error prone processes that hinder compliance and regulatory adherence.
The limitations of traditional tools have driven the development of specialised legal entity management software, with Corporify as a global leader, designed for legal departments and corporate governance professionals.
Utilizing a legal management tool gives you a lot of benefits: it guarentees that your legal entities are efficiently organized and managed in compliant and time efficient way.
Conduct the following assessment. If your answer is negative to at least two of these questions, it may be time to consider a legal entity management platform:
1. Is all information regarding your group entities accurately maintained and stored?
2. Are you aware of who has access to legal company documents?
3. Can you swiftly compile an accurate list of all current and past directorships?
4. Is your current group's organisational chart completely up-to-date?
5. Are all the group's share registers complete, and are you prepared for due diligence?
Legal entity management software streamlines the management of legal entities by consolidating all your entity documents and data into a single platform. Discover these 7 essential capabilities it can offer you:
A single source of truth eliminates scattered spreadsheets and fragmented systems, providing a unified view of data.
All entity information – ownership records, compliance filings, legal documents – is stored, accessed and managed from one secure, centralised platform.
This ensures data accuracy, saves time, facilitates stakeholder collaboration, and enables quick data retrieval and controlled access.
Advanced access control provides precise control over sensitive information:
• Role-based access: Assign specific rights (viewer, editor, admin)
• Document-level security: Control access to individual files and features
• External sharing: Share with auditors, board members and outside counsel
• Audit trails: Track who accessed what and when. This eliminates the cybersecurity risks of email sharing and enables secure collaboration.
Legal entity management requires robust security. Legal entity management platforms provide a high degree of security through various methods, including encrypted private clouds, ISO 27001-certified hosting providers, multi-factor authentication, automated backups, and tamper-proof records, to ensure data integrity.
Keeping documentation up to date is crucial for compliance and operational efficiency. This can be done through:
• Generate automatically documents from central data
• Real-time updates across all related documents
• Complete audit trails showing document history
• Time-stamped changes with user identification
• Historical document retrieval for any point in time
A good governance approach is to simplify complex compliance. Legal entity software plays an essential role in simplifying matters with these features:
• Automated document drafting for regulatory filings
• KYC and AML administration with automated workflows
• UBO reporting and beneficial ownership tracking
• Corporate governance task automation
• Regulatory deadline management and alerting
Modern legal operations require e-signing. A legal entity management platform should integrate with known solutions such as DocuSign, Adobe Sign and Nitro. Connect this with a workflow for automated signature collection, document version control and automated field population, eliminating manual data entry, and you have a compelling way of working.
Specialised legal entity management requires expert support. Support may be needed to migrate your data, onboard users, and provide technical support if required.
Share registers are the backbone of corporate governance and compliance, but many organisations struggle to keep records up to date, especially with the traditional paper-based system, which creates many challenges for legal departments.
Common shareholder register mistakes include inconsistent updates (e.g., missing address changes), security oversights (e.g., inadequate access controls), and transaction gaps (e.g., not documenting all share sales).
Use this list of 10 compliance checks to check whether your shareholder register is compliant:
Effective legal entity management requires strategic planning, the right tools and consistent execution. These best practices help legal departments optimise entity management while staying compliant and efficient.
#1 Use a single source of truth
Use a single system for all entity-related information, eliminating data silos and version control issues. Next, use consistent naming conventions, unique identifiers, and standardised fields across all entities to ensure data quality and searchability. Finally, schedule regular reviews to check data accuracy, completeness and compliance with current regulations.
Implement a strict access control by defining user roles and permissions based on job functions. Require multi-factor authentication to access data and store this data on unencrypted servers. Backups should be made regularly, with tested recovery procedures in place.
Set up automated reminders for filing deadlines, renewal dates and compliance milestones across all jurisdictions.
Generate routine documents in an automated way and based on your data. This ensures consistency and reduces preparation time.
Standardised processes for everyday transactions like share transfers, director appointments and corporate resolutions.
Use controlled access portals instead of email to share sensitive information with external parties, such as auditors, board members, and outside counsel. Sharing information by email is insecure and cannot be controlled.
Ensure all authorised stakeholders have access to current information through dashboard views and automated notifications.
Choose systems that can handle organisational growth, additional entities and expanding compliance requirements without major system overhauls. Systems should support multi-jurisdictional compliance and adapt to varying regulatory frameworks.
It is also essential to integrate your entity management systems with your existing legal technology stack, practice management software, billing systems, and document management platforms.
Entity management has moved from paper-based systems to digital platforms that cater to the complex needs of modern legal departments and corporate governance professionals.
Managing multiple entities, complex shareholder structures, and evolving regulatory requirements demands more than spreadsheets or generic document management systems.
Traditional tools (Excel and SharePoint) are basic, but lack the specialised features needed for legal entity management, including audit trails, compliance tracking and workflow management.
Dedicated legal entity management platforms provide centralised data management, granular security controls, automated compliance features and integrated e-signing that meet the needs of lawyers.
Legal departments should invest in entity management software when they :
• Manage more than 10 entities across multiple jurisdictions
• Have complex or fragmented shareholder structures
• Face increasing regulatory compliance requirements
• Currently use Excel or basic document management systems
• Need to collaborate with external stakeholders
As regulations evolve and organisations become more complex, the need for sophisticated entity management solutions will only grow. Lawyers and advisors who adopt digital now will be better equipped to serve their clients while maintaining the highest standards of compliance and governance.
The investment in proper entity management tools pays off in efficiency, reduced risk and ability to focus on strategic legal advice rather than administrative tasks.