Nearly 1 in 3 Legal Entities Have No Compliance Calendar | MinuteBox Cloud Entity Management

Nearly 1 in 3 Legal Entities Have No Compliance Calendar

Compliance with the Corporate Transparency Act is a necessary legal obligation so that entities avoid the repercussions of non-compliance. Qualifying beneficial ownership data must be submitted to federal regulators at FinCEN by pre-determined filing deadlines to maintain compliance with the enforced laws.

However, many legal entities risk undermining their compliance only weeks after the enactment of the CTA legislation. According to a joint study by Deloitte and the Association of Corporate Counsel (ACC), nearly one in three legal entities still need a corporate compliance calendar.

What is the use of a compliance calendar?

Most corporate entities have annual filing deadlines for legal, tax, and accounting purposes. A corporate compliance calendar keeps track of all compliance filing deadlines, which can include:

  • Corporate meeting minutes
  • Reporting obligations
  • Industry filings
  • Permits or accreditations
  • Merger or acquisition filings
  • Beneficial ownership reports

A compliance calendar also assists with operational efficiencies, such as standardizing compliance workflows and assigning compliance tasks to key filing dates. Aligning the compliance calendar with an organizational chart also helps expedite approvals and signatories from key organizational stakeholders.

These are among the strategic business benefits that come from maintaining a corporate compliance calendar. Unfortunately, entities with limited legal entity management resources — working time, compliance budgets, corporate counsel staff — fail to reap these benefits.

What are the costs of non-compliance?

A compliance calendar ensures all filings are submitted by the appropriate deadlines. The compliance calendar also increases compliance awareness across the business. Greater awareness leads to fewer data or clerical errors, streamlining the entity management process.

However, what’s the biggest reason why your entity needs a corporate compliance calendar? According to Ponemon Institute LLC — with sponsorship from Globalscape — the average cost of non-compliance is $14.82 million.

In a benchmark study of multinational organizations, the researchers determined that the average annual cost of compliance is $5.47 million. Contrast this cost with the cost of non-compliance, and it results in 63% annual savings by simply submitting reporting data at the appropriate deadlines.

Additionally, the cost of a single non-compliance deadline amounts to revenue losses of $5.87 million for the average legal entity. If one out of three entities still lacks a corporate compliance calendar, this means billions of potential revenue dollars are sacrificed for no justifiable reason.

What information goes on a compliance calendar?

The Corporate Transparency Act was enacted to improve how corporate entities report data on their beneficial owners. The Act is part of a government effort to crack down on money laundering, tax evasion, and other financial crimes nationwide. A corporate compliance calendar tracks all filing deadlines so that ownership data is transparently submitted without penalty.

However, a compliance calendar isn’t just useful for tracking external filing deadlines. You can use your compliance calendar to set operational compliance workflows and assign deadlines to each entity management team member. This ensures that all reporting requirements are tracked using project management strategies so that filings are submitted in detail and on time.

How to create a corporate compliance calendar

If you’re amongst the one in three legal entities without a compliance calendar, it’s time to change that approach. Assess your business needs and evaluate your past compliance processes to proactively make improvements to those workflows.

Once you’ve mapped out your compliance objectives, you can create your compliance calendar. Many modern business entities use legal entity management software like MinuteBox, which has a built-in compliance calendar to automate, streamline, and verify all compliance workflows.

Using the calendar’s guided template, follow these steps to build a compliance workflow.

  • Review current compliance trends, laws, and reporting requirements.
  • Upload the dates into your entity management platform compliance calendar.
  • Create a work-back schedule that contains all internal reporting deadlines.
  • Set up reminders for each team member and schedule them for deployment.
  • Review and modify your compliance calendar as needed.

Are you tired of conducting compliance workflows without a proper compliance calendar? Become a modern compliant business entity by joining the MinuteBox revolution. You’ll effectively maintain compliance with speed and precision while avoiding the steep financial penalties of non-compliance.