Insights and updates
from MinuteBox

Corporate governance and accountability standards often vary by region. In fact, different jurisdictions within a country can pass their own laws and regulations regarding transparency registers, regardless of what other jurisdictions choose to do.

However, some jurisdictions will follow others that took the lead first upon seeing how things work. For example, in Canada, transparency registers have legally been binding for privately incorporated companies in British Columbia. Now, other provincial jurisdictions, including Quebec, will enact the same laws for corporations headquartered in their provinces.

Quebec Bill 78: what it means for corporate transparency

In British Columbia, the laws require all information about a corporation’s significant executives to be reported on in a transparency register. The general public does not have access to this information, which is stored in the company’s own corporate records database. Aside from key executives within the corporation, law enforcement agents and inspecting officials are the only outside parties that will have access to the information contained within the register.

Similar legislation will soon become law in Quebec. One of the catalysts that inspired Quebec’s Bill 78 is an international effort to prevent corporations and their executives from engaging in tax fraud, money laundering, and the financing of global terrorist activity. The Quebec bill amends the existing legal publicity of enterprises (LPA) by adding new requirements under the Quebec Enterprise Register (REQ).

Now, all corporate registrants operating in Quebec must provide transparent records of the people, partnerships, trusts, and all other corporate entities that conduct business in the province. Non-profit organizations, Crown corporations, and certain financial institutions are exempt from the laws under Bill 78.

What information goes into a transparency register?

Corporations are often large entities, requiring lots of information to be recorded within a transparency register. But not every individual working for the corporation needs to be included within the recordkeeping process.

According to the laws, only “significant individuals” are required to be transparently registered. A significant individual is defined as anyone who:

1. Owns an interest or right to the company in the amount of 25 percent or more of all corporate shares
2. Can elect, appoint, or remove corporate directors from their executive positions

Under Bill 78, these significant individuals must disclose personal information within a transparency register to legally represent their affiliated corporations within Quebec. Information that must be registered includes things like:

• Legal names
• Dates of birth
• Contact information
• Citizenships
• Residencies

Collecting, documenting, and filing all of this information is a time consuming affair for your paralegal professionals. Additionally, should any records need to be amended or updated, it will take a lot of time for your team to modify these records, especially if they’re maintained in hard paper files. This is time that can otherwise be spent more efficiently with the right resources.

How to use entity management technology to manage transparency registers

If your corporation is based in Quebec, you’ll need to enact your own transparency register to comply with the new laws. How do you do so without sacrificing laborious hours of your paralegals’ time and energy?

The answer is to introduce entity management software into your corporate recordkeeping process. Platforms like MinuteBox automatically generate transparency registers through our Entity Information Summary that’s built directly into the platform.

Under the Entity Information Summary is a subsection called the Capital Section. It’s here that all authorized information about shareholders and corporate transactions is documented with a few insertions of data into open fields. Among those fields are areas to insert information for the company’s transparency register, ensuring your corporation is legally compliant with Quebec’s new laws surrounding corporate transparency.

The best part of this solution is that it utilizes document automation technology to streamline how firms insert bodies of text or other data into their corporate records. It’s a much faster and more efficient way to update information legally required for a transparency register or any other corporate record. Plus, these are code-free platforms, which means you don’t require tech gurus and experienced developers to manage your records. Simply open up the platform and the work can be complete within minutes!

Are you part of a Quebec-based corporation and in need of an efficient solution to complete your transparency register? Join the MinuteBox revolution so that you can comply with updated corporate governance in a fast and efficient manner while maintaining your commitment to accountability and transparency.

Every business entity has expenses, but how they’re incurred varies by industry. As a law firm, you have the option to disburse fees to your clients. Some of the most common operating expenses legal professionals incur on behalf of their clients include the following:

• Corporate registration fees
• Fees to continue, convert, or dissolve the status of the entity
• Name reservation and approval fees
• Annual return filing expenses
• Corporate constitution and by-law amendment fees
• Document issuance and certification fees
• Title protection fees
• Expedited services fees

It’s entirely appropriate for your legal team to disburse those costs to your clients as part of your billable hours. However, those disbursements must be fair and appropriate for the amount of work undertaken to complete the clerical duties.

Additionally, there are two ways to pass on disbursements to clients. The first way is on an individual basis for each and every expense incurred on behalf of the client. The second way is to use entity management software and digitize all records, ensuring that all invoices are appropriately disbursed to the clients.

In this post, we’ll summarize the two options and the benefits to your firm.

What are common examples of disbursement fees?

Let’s begin with the biggest question of all: what are examples of disbursement fees that can be billed to clients? Here are four of the top ways legal professionals can incorporate fees to their billable invoices to clients.

Annual fee for acting as agent for service representing an entity

Suppose you represent a foreign entity that wishes to conduct business in Canada. As the legal representative of that entity, your firm operates as an agent for service on behalf of your client. An agent for service fee is an annual emolument that retains your firm to handle corporate registrations and entity management with Canadian regulators.

Registered office fee for acting as the registered address of an entity

This is another example of how best to represent foreign entities operating within Canada. Since the business entity is headquartered overseas, your firm legally substitutes as the official registered address of the business entity within Canadian jurisdiction. The registered office fee is a disbursement cost you invoice to the client for assuming that responsibility.

Monitoring fee as compensation for compliance monitoring for an entity

Once your clients are registered with the proper regulators, they need to adhere to the laws and regulations of the industry. A compliance monitoring fee is how your firm is compensated for all the time spent identifying and managing compliance risks for your client.

Ownership & control monitoring fee for an entity

The beneficial owners and shareholders of a business entity require representation to ensure beneficial ownership information shared with regulators is accurate. An ownership & control monitoring fee compensates your firm for that representation.

How to bill disbursement fees

Disbursement fees can be billed to clients in a number of ways. Note: this is a recommendation rather than strict legal advice. It’s best to negotiate the billing options with clients prior to commencing with any professional legal services.

There are three primary ways that your legal services can be charged to clients:

1. Hourly rates for the time that your team spends on clerical tasks
2. Sequential fees that represent each stage of the clerical duty
3. A flat fixed rate that covers the total cost irrespective of the time

Ensure disbursement fees are fair and reasonable

Disbursement fees can be passed onto clients by lawyers and paralegals provided the fees are fair and reasonable. Part of what constitutes fair and reasonable is that the clients are given ample warning that the expenses are part of the legal services rendered by your firm.

The exact terminology that defines fair and reasonable may vary by jurisdiction. For example, the Law Society of Ontario describes a number of factors that must be accounted for when passing on disbursement costs to clients in Ontario. These factors include, but are not limited to each of the following:

• Time and effort spent on clerical tasks for a business entity
• Any additional skills or services necessary to complete the tasks
• Circumstances that can result in delayed payments or lost retainers
• Any established agreements between legal professionals and their clients
• A client’s consent to receive disbursement fees

Some jurisdictions demand multiple disbursements

How disbursed expenses are deemed fair and reasonable is similar across many jurisdictions. The most important requirement is that clients be made aware of what disbursement costs will be charged to them, and why.

In some jurisdictions, your team may incur multiple fees for individual clerical duties. For example, a voluntary dissolution of an entity in British Columbia requires a fee for both the filing of the resolution to dissolve the entity, as well as a fee for an affidavit. A dissolution cannot proceed without the payment of both fees to the regulators.

In this scenario, it’s imperative to inform clients about the dual fees to complete the dissolution. Only with their knowledge and consent can the filing proceed and the cost pass onto the client.

Disbursement fees option #1: individual filings

Now, there are two main ways to manage disbursed fees that you pass onto clients. The first option is through individual receipts and invoices. This is a traditional method often used by many legal professionals. It does, however, carry significant risks and inefficiencies.

For one thing, you need documents for each expense. A disbursed cost is only fair and reasonable if the client knows what costs are passed onto them. Suppose regulators have charged your firm multiple fees to complete one clerical task for a client. You need the proper documentation for all those records.

Each record must be filed and organized within your office storage space. The risk with this approach is that there’s always the possibility a record could be lost or misplaced. It also carries significant costs for your firm that you can’t pass onto clients. More records require more storage space, and a single five-drawer filing cabinet costs up to $2,000 in most offices. If you’re storing records for many different clients, you need a lot of filing cabinets to organize the documents. Are all those storage costs really worth it?

Additionally, sorting through each of those records takes up precious time for your legal team. Clients may be unhappy paying for filing expenses and then additionally paying for the time spent by your team to sort and organize the records for those expenses. Unhappy clients risk churning away from the firm, putting a dent in opportunities for repeat business.

Disbursement fees option #2: entity management software

The second option is to eliminate the need for paper records, multiple invoices, and expensive office storage space. How do you do that? You use entity management software.

Entity management software is cloud-based technology. It includes built-in professional scanners that allow your team to upload all receipts for expenses, filings, and other documents into the cloud. Entity management technology can also support your accounting managers and how they use software. You can use your entity management platform’s billing component to track expenses and assign the appropriate disbursement costs to clients as needed.

This means there’s even less need for expensive office storage space. You don’t need to maintain binders and filing cabinets full of paper documents that just take up space. Automatically, you’re saving money while also passing on the appropriate expenses to clients as part of your billable hours.

Not only is this a more cost-effective workflow; you save valuable working time for your legal team. Everything is digitized so that you can sort, tag, and organize documents in minutes instead of hours or days. The platform’s advanced search parameters allow you to instantly pull up any records in question. You can avoid charging clients additional fees for time spent organizing clerical records, improving client satisfaction rates and repeat business opportunities.

Don’t miss out on the modern approach to legal entity management. Join the MinuteBox revolution, become more efficient, and ensure your clients get the greatest value from your professional legal services.

Corporate paralegals must have an attention to detail and stringent organizational skills to thrive in their careers. They also need excellent communication skills and an inherent ability to simplify complex legal jargon for corporate managers, directors, and shareholders to comprehend.

Since paralegals spend most of their days conducting research for cases, tracking deadlines, managing schedules, and filing minute book records, great organizational and communication skills are the bedrock of how paralegals build sustainable careers. Additionally, they need the right tools to manage expectations and monitor all important records.

Why entity management software is a paralegal’s best friend

Among the most helpful resources for corporate paralegals are entity management solutions. Entity management software is an intuitive, cloud-based platform that simplifies how legal teams manage large amounts of data for various legal entities.

As a corporate paralegal, managing all the legal entity affairs for the parent company is a taxing challenge in itself. If the entity has multiple subsidiaries under its corporate umbrella, it becomes significantly more difficult to remain organized, responsive, and transparent with all the people involved in managing those corporate affairs.

Entity management software automates many clerical tasks with time-efficient workflows. This is the best way to maintain those coveted organizational skills as you manage multiple entities and subsidiaries. Additionally, by automating most of the clerical work, you have more time to address any questions or concerns about minute book records from corporate executive teams.

How entity management software supports paralegal skills

Organizational and communication skills are critical components of a successful paralegal’s career. Now, let’s break down some of the tactical competencies of a paralegal’s day to day activity and how entity management software helps paralegals conduct themselves.

Managing documentation for mergers and acquisitions

Suppose the business entity your paralegals represent is undergoing an acquisition of a separate entity. Think about all the steps involved in an acquisition process:

• Researching the entity in question
• Contacting executives of that entity
• Making introductions with your own executive team
• Submitting an offer to the financial and legal heads of the entity
• Conducting due diligence into the entity’s financial history
• Preparing the documents that legalize the note of acquisition
• Preparing the documents that finalize the acquisition deal
• Submitting all the paperwork with regulators

It’s a lot of work, and it requires managing time with a lot of different stakeholders. Entity management software allows your paralegals to maintain diligent and digitized records that monitor each step of the process. Your paralegals use the platform to track important filing dates for each stage of the process, keeping an organized checklist of signatory approvals necessary to complete those files. They can then note the record on the platform so the process can continue.

Maintaining accurate records to support corporate governance

Here’s another hypothetical scenario. Suppose your company has received a summons from federal regulators to conduct an audit. Your legal department is tasked with leading the coordination with the regulators to keep the business out of any legal quandaries.

Entity management software is one of the best resources to maintain accurate and diligent records of all corporate transactions. Every time a purchase is made, an acquisition is conducted, or a shareholder invests new capital into the entity, it can all be recorded within the platform to promote proper corporate governance.

The consequences of failing to comply with corporate governance policies can potentially bankrupt your business entity. Look no further than the FTX case that forced the company into insolvency and resulted in criminal charges against the founder as he awaits trial.

Corporate governance ensures your entity is prepared for any regulatory inquiries or investigations. Your paralegals use entity management software to maintain accurate minute book records, and they can assist your in-house counsel with communicating the details of those records to the regulators at the appropriate times.

Protecting confidential entity information with advanced security measures

Any corporate documentation is extremely sensitive and confidential. It requires paralegals to maintain rigid organizational standards to protect the contents of those records.

The problem with traditional methods of corporate recordkeeping is that paper files are so easy to lose or misplace. Suppose a record with a signature from a corporate manager is lost in cluttered office spaces, negating the authorization applied to the record in question. What kind of setback does that create for the company as a whole?

Additionally, this process is very tedious and time consuming. On average, it takes paralegals up to five minutes to sort, tag, file, and organize a single page in a minute book record. Each minute book contains numerous pages, and there are likely multiple minute books in any standard office filing cabinet. Multiply all those records by the number of pages stored within, and you can see how much of your paralegal’s time is spent organizing paperwork in unsecure ways.

Entity management software is backed by biometric and hardware key authentication. This ensures that only those who have been given specific access to the platform can view the records. It protects the security of your business entity, an important step in the road towards corporate compliance and good governance.

A corporate minute book is a collection of basic, but necessary records for incorporated companies. Much like a patient’s health history or a high school student’s permanent record, a minute book contains information about the status of the corporation, its shareholders, directors and corporate board minutes, as well as other company specific information.

Sections 20(1) and (2) of the Canada Business Corporations Act state the following:

• 20 (1) A corporation shall prepare and maintain, at its registered office or at any other place in Canada designated by the directors, records containing
  • (a) the articles and the by-laws, and all amendments thereto, and a copy of any unanimous shareholder agreement;
  • (b) minutes of meetings and resolutions of shareholders;
  • (c) copies of all notices required by section 106 or 113; and
  • (d) a securities register that complies with section 50.
• (2) In addition to the records described in subsection (1), a corporation shall prepare and maintain adequate accounting records and records containing minutes of meetings and resolutions of the directors and any committee thereof.

Thus, according to the CBCA (and other provincial business legislation), corporate records must not only be prepared for every corporation, but must be maintained accordingly. A set of corporate records that is poorly kept or out of date is in violation of the CBCA.

The answer to the initial question then is YES, your corporation does need a corporate minute book.

But the importance of an up-to-date minute book cannot be understated and goes well beyond a legal requirement. Corporate transactions, whether loans, sale or purchase of a business’ assets or shares require a review of a corporation’s minute book. The CRA can always call for a “surprise” audit which may require an examination of a company’s minute book.

Understandably so, minute books are the last thing a client or law firms thinks about, but can often delay loans, financings or transactions, and can dramatically increase legal costs as a result.

Cloud-Based Tech Helped Many Industries. It’s Legal’s Turn

Cloud-based technology has made an impact and, in many ways, revolutionized how people share both personal and professional information. Think of platforms like Slack, Okta, or Box that allow users to send and receive files within secure password-protected environments.

Similarly, platforms like Facebook or LinkedIn have made it very easy for any individual with an account to share updates with friends or followers. Plus, with one direct message to a specific point of contact, you can pass along important files relevant to the conversation.

Modern technology has made connectivity easier than ever before. Yet in some industries, such as the legal professional community, innovation has not been so openly embraced. The question is: why are so many law firms still relying on clunky old software or, even worse, binders to store, manage and share important documents?

Some law firms worry about security and cybersecurity

Some of the reluctance by law firms to embrace cloud-based entity management solutions is the fear of being hacked. To be honest, those concerns are not without some merit. In a recent survey of 450 UK-based companies, two thirds of respondents admitted they were the victims of a cyber attack in the first 18 months of the COVID-19 pandemic.

However, cyber hacking isn’t exclusive to cloud-based servers. Large organizations with on-premise servers are still the victims of cyber attacks. While on-prem and cloud-based servers are both targets for malicious acts, cloud services like Google, AWS and others have thousands of PHd-level security teams working to keep those servers as secure as possible. Most law firms are limited to a small team of cybersecurity experts, making resource allocation at law firms a very real challenge to protect those on-prem servers from potential hacking.

Additionally, physical binders stored in the office itself are susceptible to fire, theft, unintentional misplacement, and other causes of loss or damage. Any of these misfortunes, accidental or otherwise, could compromise the security of those files and potentially risk exposing secure client information.

Finally, cloud-based security is more vital than ever as coronavirus forces more firms to embrace remote work as an acceptable norm. Cloud-based entity management platforms allow colleagues and clients to share confidential information without the risk of exposure.

Why law firms should embrace cloud-based solutions

Aging technology has made on-premise servers more vulnerable to cyber attacks. Cloud-based solutions use more sophisticated technology that includes additional layers of security to protect your clients’ rights to privacy. Nevertheless, we can acknowledge that there are no foolproof solutions when it comes to security, so let’s focus on value. The irrefutable fact is this: firms that use cloud-based entity management platforms can improve their bottom line, streamline their operations and create economies of scale to facilitate faster growth.

Cloud-based servers are cost-efficient

On-premise servers are expensive to maintain and, as previously noted, most law firms only have a limited number of professionals who can keep those servers secure. Not only are you paying for the server hardware, but you have to factor in salaries, maintenance, and other capital costs to keep them functional.

By migrating your files into the cloud, you can scale down or, if you choose, eliminate those on-prem servers from your office. All of those operational costs to maintain the servers can be reinvested back into the business in favour of growth-based strategies.

Cloud-based technology makes it easy to access all relevant documents

The day to day tasks for law clerks, paralegals and other professionals are often repetitive and time consuming. This is all the more challenging when clerks are required to manually input data or other relevant information into minute books and other documentation from both online and offline sources.

Using cloud-based solutions, you can make this entire process more efficient. All minute books, contracts, and noteworthy records are stored in one secure and convenient cloud-based database. Any clerk with access to the platform can go into the account and pull all relevant files to a particular case within moments. This is a highly efficient way to make a clerk’s time more productive so that they too can get back more time to contribute to the growth of the firm.

Lower costs and more efficient operations create economies of scale

This is the key reason why you should embrace forward-thinking solutions. Lower fixed and operational costs mean you’re spending less money to maintain your business. More efficient productivity from clerks and other professionals on your team make your firm more structured, streamlined, and well run.

Add all of those benefits up and it amounts to the economies of scale that enable any law firm to set the foundation for high growth results. You can devote more time (and billable hours) towards providing true value to your clients, and spend less time on the day to day tasks of storing, securing, sharing, and updating minute books. In the end, that’s your ROI to make an investment in cloud-based solutions worthwhile.

Ready to make your firm more productive and more efficient? Join the MinuteBox revolution so that you can create an environment that is guaranteed to create the optimal conditions to scale the growth of your business.

Enterprise corporations expand their reach and footprint into diverse global markets every day. Managing global growth plans is one part of an expansion strategy, but those plans aren’t the only boiler plate item for a growing corporation.

Expanding a corporate entity requires numerous satellite branches and subsidiaries to effectively operate. Some of those overseas subsidiaries will come through select mergers and acquisitions, and others are willfully established by the parent entity.

However global subsidiaries are created, they represent the interests of the global brand in select markets. As a business entity in itself, each subsidiary has annual activities that must be accurately reported. All subsidiary reporting data is legally required to remain in compliance with regulatory laws.

Concerned that your legal and compliance teams may become overwhelmed by increasing volumes of subsidiary data? Not to worry because here are five effective strategies to help your teams optimize global subsidiary management.

1. Embrace automated data management systems

The greatest burden placed upon legal and compliance teams is clerical and administrative work. This is often repetitive, time consuming work that restrains full productivity for your legal and compliance teams. Teams inundated with boundless amounts of clerical and administrative work struggle to achieve full productivity, which demoralizes workers and can increase the risk for paralegal burnout.

Instead of subjecting your legal and compliance departments to excessive workloads, embrace automated technology to shoulder some of the burden. Entity management systems are designed to streamline and automate most clerical and administrative tasks. Teams that use these systems save invaluable working time, thereby improving productivity, increasing morale, and assisting with the global growth of the corporation.

1. Create a bulletproof risk management strategy

Every decision in business includes some degree of risk. Expanding into global markets with subsidiary presences have potential high degrees of risk due to factors like the geographic, political, industrial, or regulatory frameworks in those regions.

Enacting a proper due diligence process reduces risk and consequences for the global entity. When undertaking a merger or acquisition, ensure your legal, compliance, and financial teams conduct thorough due diligence on the target acquisition. If reporting data fails to meet corporate governance standards, the benefits of the acquisition don’t outweigh the risk.

You can also assign more time and resources towards subsidiaries that do carry a higher degree of risk. Balance the responsibilities of your global legal and compliance teams by optimizing their time against subsidiaries with the greatest risk. Do whatever is necessary to minimize risk to your corporate interests.

1. Create a single source of truth for filing and reporting

Managing global compliance for multiple subsidiaries in different markets is a difficult task. It’s even more complicated when filings for things like compliance deadlines, regulatory amendments, corporate by-law updates, and other factors are all stored in different locations.

Simplify these workflows by creating one standard bearer for all subsidiary reporting data. Entity management software functions as a single source of truth for all these reporting variables, allowing your global legal and compliance teams to smoothly oversee operations.

Entity management platforms have built-in compliance frameworks to assist with global subsidiary management. The frameworks monitor organizational charts, calendars, workflows, and other templates to enforce global compliance.

1. Improve global visibility and transparency into all data

By creating a single source of truth for all subsidiary reporting data, all stakeholders have clear visibility into the entire organization’s operations. Visibility and transparency make it easier to complete annual subsidiary filings and reduce the risk for errors or subsequent filings.

It’s natural that stakeholders will have questions about reporting data. As part of the global growth plan, executives need to know where to distribute additional resources. Subsidiaries with the greatest growth potential and the least exposure to legal or compliance risk are prime destinations for rapid expansion.

By creating visible and transparent oversight into all reporting subsidiary data, stakeholders can review the numbers and get immediate answers as to how to invest in growth.

Use entity management software to support global growth

The bottom line is that global subsidiary management is a complicated process that places enormous pressure on legal and compliance departments. Why keep the process so complicated when you can streamline the entire workload using modern technology?

Entity management software is built by legal professionals to support legal professionals, and MinuteBox is the first platform to achieve dual security certification. Data security is of vital importance when reporting on subsidiary operations, so you want a solution that simplifies the reporting process while maintaining the highest data security standards.

Join the MinuteBox revolution today and optimize global subsidiary management to support your corporate interests.