Insights and updates
from MinuteBox

A subsidiary governance framework enables multinational corporations to manage their various legal entities prudently and responsibly. Implementing a strong subsidiary management framework can help prevent costly financial and reputational damage to the corporation’s brand identity as well as damage to their good standing in the marketplace.

Corporate entities are often complex and structured in very difficult ways that magnify the burden of compliance with federal regulations. Often, the corporate counsel departments that manage the legal aspects of these various entities are resource-lite and tasked with other responsibilities to the corporation.

Corporate counsel feel the pressure of their responsibilities

According to the 2022 In-House Counsel Compensation & Career Survey, which was conducted by The Counsel Network and the CCCA, over 50% of surveyed corporate counselors have responsibilities that go above and beyond maintaining corporate compliance.

A corporate counselor’s primary mandate is to provide legal services to individual employees of a corporation as well as legal counsel to protect the interests of the company as a whole. As part of their mandate, a corporate counselor’s day to day duties can include any of the following:

• Thorough legal research
• Contract evaluations and analyses
• Property law assessments
• Collective bargaining agreements
• Negotiations with government regulators
• Patent filing

Additionally, corporate counselor services may be required to:

• Consult with accountants or auditors to review corporate tax filings
• Prepare and review company documents for mergers and acquisitions
• Draft contracts for the leasing of equipment for the corporation
• Sit in on corporate meetings to discuss official governance policies

Majority of in-house counselors burdened by stress

Another study was conducted by the Canadian Corporate Counsel Association and Mondaq. They surveyed over 460 in-house legal professionals across Canada. According to the findings, 61% of chief legal officers and general counsel experience higher levels of stress and anxiety. This is largely due to the onus on their shoulders for the entity’s corporate compliance.

The numbers are even more concerning in publicly listed companies. The study found that 75% of general counsel representing public firms admit to recurring experiences of stress.

Help your corporate counsel reduce their stress by simplifying their workloads. Ensure your legal department has the resources to conduct proper entity management. If you’re being represented by outside counsel, request a meeting if there are gaps in the deliverables. Make an honest effort to better understand the situation. Perhaps resources were stretched very thin, a clerical oversight was made, or another unexpected reason. Don’t rush to make a bad judgment call without knowing all the facts.

Ensuring your corporate counsel is de-stressed isn’t just the moral thing to do; it also makes great business sense. Legal resources ensure quality and consistency in the entity management workflow. These are the necessary ingredients for accurate minute book records, vital documents should an audit be conducted on your business.

Tips to help corporate counsel simplify their workloads

Mindfulness, focus, and avoiding distractions are all ubiquitous best practices to help people in all professions improve their productivity. Corporate counsel benefit from these same approaches, but here are some specific ways to improve productivity in the legal department.

Improve time management skills

The high-stress environment of subsidiary management and corporate counsel requires legal professionals to operate with a high performance mindset. Time management is a vital skill to fulfill the needs of the corporate entity and avoid succumbing to the anxiety of all that work.

A time efficient subsidiary management solution automatically tracks all important dates related to contract negotiations or expirations and helps in-house counsel prioritize their tasks. They can adopt a work-back approach in their schedules, using those dates as the markers on the calendar. Tasks can be assigned in order of priority based on their relevance to the overall deliverables that must be implemented by those end dates.

Transparent communication with clients and colleagues

Upfront communication with clients and colleagues means the process is always moving forward. Any approvals or signatures to move a task along in the production pipeline are easily acquired by keeping all parties in the loop.

With a subsidiary management platform, all communications regarding corporate records are simple and straightforward. Prompts for signatures or reviews of corporate records are sent to the appropriate recipients, and, provided they have authorized access to the account, they can review those records at their own convenience. This saves your in-house counsel the time and stress of chasing people down to get important answers.

Modern minute book recordkeeping organizes all corporate documents

Finally, adopting a more modern approach to minute book recordkeeping eliminates most of the timely and stressful tasks of clerical work. As a corporate counselor, imagine the feeling of stress lifted off your shoulders knowing that there’s no risk any of your corporate entity’s official records will be lost or misplaced. Modern technology makes that hypothetical feeling a reality.

Using subsidiary management clouds, you can upload all corporate minute books into a secure platform that’s backed by biometric and hardware key authentication. Only the corporate officers and directors granted access to the account can view the records, ensuring all information remains as secure as it is convenient to access. There are also built-in integrations with e-signature solutions, allowing your legal team to gain required signatory approvals in minutes instead of days or weeks.
Help make your corporate counselors’ lives easier and more fulfilling. Join the MinuteBox revolution so your legal team can fall in love with subsidiary management all over again.

Companies that make corporate governance an integral part of their risk management strategy are positioned for compliance. Corporate compliance means any audits of internal controls, organizational governance, and subsidiary management procedures are smoothly executed. It’s governance policies that are one of the principal non-financial factors to set corporations up for strong fiscal performance.

It seems like a no-brainer; however, far too many companies fail to take the risks of poor subsidiary management seriously. They’re not small fish in the pond either. Companies like Eron, Cadbury, Xerox, Wal-Mart, and other Fortune 500 brands have faced significant costs resulting from poor corporate governance.

How corporate governance improves financial performance

In a two year study involving publicly traded companies on the S&P 500 Index, corporations with strong governance policies outperformed the weakest firms by 15%. The study also determined companies that faced governance crises underperformed in their sectors by as much as 35%, on average, a year after their compliance crisis. This resulted in a loss of shareholder value exceeding $490 billion.

Despite the costs of poor corporate governance, it remains an ongoing challenge for many firms. Poor corporate governance structures result in bad decision-making, lack of accountability and transparency, and a direct loss of financial returns.

Common red flag warnings of poor corporate governance

What are some of the warning signs that indicate a corporation is falling into a governance crisis? Fiscal mismanagement is one of the biggest red flags in any governance audit. Businesses can look no further than the financial scandal that tanked FTX as a case study of how not to manage corporate funds.

Additionally, an inept leadership team and board of directors cause expensive corporate governance problems. Companies that promote based on nepotism or “yes-man” cultures can ignore disciplined expert advice on business strategy, organizational hierarchy, or financial incentives, resulting in costly mistakes for the business.

How to avoid falling into corporate governance pitfalls

Effective leadership makes all the difference between companies that fall into the group of top-performing S&P firms and the ones that find themselves at the bottom. Leaders that set the tone right from the top create corporate cultures built upon shared values and behaviors. Executives that adhere to those values will make responsible decisions with the entities that, in turn, create more profitable long-term results for the corporation.

By avoiding things like nepotism and unmerited promotions to leadership positions, corporations can build a leadership culture that makes the best strategic decisions for their business entities. Adopting a business regimen that demands accountability and transparency with all corporate records ensures receipts for all business decisions are documented. In the event of a corporate audit, the company can comply with the regulators and maintain a responsible brand reputation.

Use subsidiary management software for accountability

So what’s the best approach to maintaining compliance with responsible corporate governance? As it turns out, technology can help corporations of all sizes maintain rigid, accurate, and transparent records to support good and responsible governance.

Subsidiary management technology uses cloud-based solutions to help companies digitize all corporate records in one centralized platform. The platform includes advanced search parameters that allow in-house counsel to find, sort, and report on any records of notice for executive review or approval, as well as any audit requests from outside regulators. Plus, since the platform is cloud-based, any leaders that require access to the records can view them from the convenience of any location in the world.

Subsidiary management platforms also allow your counsel to quickly generate reports that summarize things like capital purchases, mergers and acquisitions, or the transfer of shareholder equity amongst investors. All legal dates and expiries can also be tracked within the platform, which is very important if any licensing deals require renewals or renegotiations.
In the end, responsible corporate governance is one of the defining factors that separate successful companies from mediocre ones. Using subsidiary management technology, which you can learn more about with educational discussions, you can help your own company remain compliant with good corporate governance, and set your business up for success in the future.

Legal professionals are required to maintain diligent minute book records to remain compliant with federal and provincial laws across Canada. Minute books are how corporations remain accountable and transparent to their executives, their shareholders, and even different levels of government. Minute books summarize important details about a corporation, including:

• Articles of incorporation
• Constating corporate documents
• Corporate by-laws
• Official resolutions
• Shareholder ledgers
• Director ledgers
• Shareholder agreements
• Notices of consent

The process of maintaining minute book records is known as entity or subsidiary management. While these two functions are synonymous in many ways, there are distinct differences between the two approaches. How do they differ from each other? Let’s dive into that!

Minute book records allow corporations to remain compliant

Minute book records are required for corporations to remain in compliance with the laws stated by the Canada Business Corporations Act. All corporations are required to accurately report any changes to the corporation’s finances, operations, and shareholder agreements. This is primarily to ensure that the corporation operates fully above board and can provide accurate records of all financial transactions to the Canada Revenue Agency should an audit be required.

In addition to legal compliance, it makes good practical and business sense for corporations to maintain accurate minute book records. In the event that there are disputes about executive decisions or discrepancies between shareholder equity, up-to-date minute books allow the disagreements to be resolved accordingly. Ultimately, all corporations have responsibilities to their owners, to the government, and to any other stakeholders invested in the business.

The best way to think about minute books is to view them as a snapshot of a corporation’s value at a fixed period of time. Minute books allow corporations to maintain accurate records of past decisions, so that the focus of future executive or shareholder meetings remains on how to scale future growth for the corporation.

How your corporation documents minute book records

The process to create and manage minute book records depends on one key variable. Are you a legal professional hired by a corporation to manage their legal affairs, or are you part of an in-house corporate counsel that oversees all compliance matters? Depending on your role, you’ll undertake either an entity management or subsidiary management process to maintain accurate and transparent minute book documents.

What is entity management?

Entity management refers to the process of managing legal entities like corporations, trusts, partnerships, and other legal entities. The purpose of entity management is to ensure legal entities, such as corporations, live up to the various responsibilities and obligations to the various stakeholders invested in those entities.

The entity management process is chiefly undertaken by legal professionals who are either independent professionals or members of a law firm. In either case, these legal minds have been hired by a corporation to manage their minute books and corporate documents to remain compliant with Canadian jurisdictions.

What is subsidiary management?

Subsidiary management is a subset of entity management, which involves the corporate governance management of a corporation and their related subsidiary entities. Similar to the broader entity management process, the purpose of subsidiary management is to ensure all responsibilities and obligations are upheld by the corporate entity.

The distinction that separates subsidiary management from the broader entity management lies in who is responsible for the recordkeeping. Subsidiary managers are in-house corporate counsel who manage the same directors and share capital across many entities. This could involve as many as tens to hundreds of related parties.

How to use entity or subsidiary management software to manage minute book records

Whether you’re part of a law firm or part of an in-house corporate counsel, minute book management is an essential part of your role to support the corporation. Having the right tools to make this process seamless enables your own legal team to manage time and resources in a prudent and efficient manner.

That’s why entity/subsidiary management software is such a valuable asset to legal professionals. These solutions modernize the entire minute book record keeping process. You can eliminate physical binders of minute book records from your day to day routine by transferring all minute book files into digitized records that live securely within the cloud.

Cloud-based solutions are backed by biometric and hardware key authentication parameters, ensuring only people with approved credentials can access the files in the platform. If there are disputes between shareholders, the matter can be resolved in a matter of minutes by using advanced search capabilities to immediately pull up the file in question.
Entity/subsidiary management makes great business sense for legal professionals. These platforms make legal representatives more efficient, which helps reduce administrative costs. Additionally, clients are far more satisfied with your legal services, since you can provide answers to their pressing questions instantaneously. Finally, you can even give your legal team a leg up when attracting new talent by positioning your entity as an innovative leader in entity/subsidiary management!

Keeping your corporate digital minute book up to date ensures your clients have immediate access to all of their official records. Providing clients with up to date records in an easy and convenient manner goes a long way towards boosting client satisfaction. Highly satisfied clients are more likely to stick with your firm for longer periods of time, improving client retention rates and helping further grow your own firm’s business.

The fastest and easiest way to provide those clear answers to your clients is through the use of entity management software. These types of platforms are trusted by legal professionals for a reason. They allow you to centralize all of your minute books in one convenient location, speeding up the time it takes to find important records for your clients.

Even better is the fact that these platforms have built-in advanced search capabilities to uncover a specific file within minutes. This makes organizing and retrieving minute book records and corporate information much easier compared to combing through stacks of paper documents.

How to organize minute books with cloud-based software

If you choose entity management software to organize your minute books, the next logical question to ask yourself is this: how do you actually organize minute books within the platform? While there are some details that will be unique to your firm’s situation, you can use this overview to establish the basics.

How to Manage Minute Books for Corporate Law?

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Start with the sections and tabs

Organization is only possible if you decide how to categorize all of your records within the platform. To do that, it all begins with the sections and tabs you create within the platform hierarchy. You can select a variety of styles and names for tabs in a minute book. Define how those styles and names best reflect the way your firm operates, and how you will provide service to your clients.

Decide how to segment files by record type

There are a number of different file types that you can store within your minute book. You could create categories in the form of:

• Corporate ledgers & registers
• Company ownership charts
• Shareholder cap tables
• Capital transactions between shareholders
• Etc.

Identify the categories that best describe the record types maintained by your firm on behalf of your clients. By creating categories for each of these record types, it makes tagging, filing, and searching for those records much easier after the information is uploaded into the platform.

Scan and upload all minute book records into the account

Now that you’ve created the sections and record types you’ll use as the framework to organize a corporate digital minute book, you’re ready to upload the records themselves into the platform.

The uploading process is actually very straightforward if you use MinuteBox as your entity management solution. Simply coordinate with our team of scanning professionals and arrange a time to have those professionals come by your office. All scanning is completed on-site and no records ever leave the four corners of your office. This is part of our guarantee that all data is secure and fully protected from the moment our professionals begin the transformation process.

Once on-site, our enterprise grade scanners do all of the work. We’ll transition your record book collection to the cloud efficiently, securely and with the highest quality standards for security. We also throw in our commitment to maintain the highest quality of integrity!

Fast and easy adoption of the solution

Once the upload process is complete, you’re ready to start using and managing your account. You can invite clients to access their corporate records from the cloud, guaranteeing that each client can find and leverage all records pertinent to their immediate needs. Migrating all minute book records into MinuteBox will also modernize your entire workflow. You’ll also help your legal and paralegal professionals earn back valuable time without having to comb through individual paper records for answers to client questions. The speed and ease with which your team can uncover this information is exactly how to improve client satisfaction, ultimately contributing much higher Legal Recurring Revenue for your firm.

Cloud storage of important corporate records is one of the most convenient and efficient methods to store all of that data. It reduces the need for physical records and the storage space necessary to maintain all of those files. It’s also a far more secure method to preserve important client information as there’s no risk that an important minute book file may be lost or misplaced.

Now, every piece of technology has its pros and its cons. But it’s the benefits of secure cloud storage that ultimately make a difference in the day to day of working professionals. For that reason, let’s take a look at five of the most important benefits provided by secure cloud storage software. We’ll outline each of those advantages and how they ultimately make the lives of people who use the technology much easier.

1. Secure cloud storage is user friendly and easy to access

Without question, this is one of the most important benefits of secure cloud storage. The ease of use and ability to access important information from anywhere with an internet connection makes it more convenient for business leaders and their legal representatives to sort, review, finalize, and approve of minute book records all in a matter of moments.

How it works is very similar to the Google Drive experience. Most professionals are familiar with GSuite platforms; you simply upload your files into Google’s secure cloud-based storage and you can access them at your own convenience.

Entity management platforms are very similar. Using state of the art, on-site enterprise grade scanners, you can digitize your entire minute book collection and have access to those records anywhere in the world. It’s a more convenient and user-friendly way to manage important legal documents and maintain professional interpersonal relationships with your clients.

2. Advanced security protects all confidential information

Your minute books may be in the cloud, but they’ll be protected by the most sophisticated security parameters available. Once uploaded to your entity management platform, biometric and hardware key authentications are necessary to access the account to view the files. And the best part of this solution? There’s no coding skills necessary to make the platform work for your needs, creating a streamlined and efficient approach to secure minute book management.

Entity management software like MinuteBox is built using the most advanced cybersecurity measures developed to date. It’s part of an overarching commitment to maintain the highest standards of data security, data integrity, and data accessibility. Client data deserves secure protection, and that’s what these platforms provide in one centralized location.

3. Secure cloud storage is more cost efficient

Any time that a business can demonstrate how a key piece of software actually reduces other costs builds its case for more investments in cloud-based solutions. When using secure cloud storage, the cost effectiveness of the platform is measured in three key ways.

Save money on office space

You need office space to properly store physical binders of minute book records. By digitizing those records, you eliminate the need for that extra office space. Instead, you could reallocate the money that would be spent for additional storage on hiring more support staff to further grow the business. On the flip side, you could downgrade your entire office and save more money on rent and other overhead costs.

Get rid of those expensive filing cabinets

Without the need for physical records on-site at the office, you can reduce the number of filing cabinets maintained within the workplace. Have you ever thought about how much filing cabinets actually cost your business? Believe it or not, it costs, on average, as much as $2,000 for one five drawer filing cabinet.

Suppose you have a large portfolio of clients that each have multiple minute book binders and records to maintain. Suddenly, your office space is overflowing with filing cabinets that cost thousands of dollars apiece. Why continue incurring those costs when there’s no need to do so?

Earn back more time for billable hours

The best way to measure the cost effectiveness of digitized minute book records is the amount of time given back to your paralegal professionals. Rather than spend several hours of each day combing through binders of physical documents, your paralegals could find answers to pertinent client questions in minutes with advanced search capabilities in your entity management platform.

All of a sudden, your paralegals have hours upon hours of time back that can be used in a more productive manner to grow the interests of the firm. If you can prove that more members of your team are actively contributing to the growth of Legal Recurring Revenue for the business, your investment in secure cloud storage will pay off in spades.

4. Client file sharing is easy and efficient

Imagine a scenario where two firms have clients asking to review or certify information in their minute book records. One firm uses physical minute book binders to organize client documents, and the other firm has digitized the process. It could take several hours to go through all of the physical records to find the one file that the client asks about. The digitized process can find that file and share it with the client within minutes.

It’s so easy to share important legal information using secure cloud storage that clients no longer have to wait for answers to their important enquiries. In those two scenarios, which client do you think is the more satisfied and likely to retain their business with the firm? The faster that you can provide quality service, the more satisfied your clients will be.

5. Secure cloud storage improves workflow automation

It’s not just the ability to share files with clients that gets easier through secure cloud storage. Your entire workflow becomes more automated, more efficient, and more effective. Plus, you can make traditional boring or mundane legal tasks more fun again.

Make the entire process more fulfilling for your legal professionals. Your team will spend less time on unrecoverable legal work and more time providing value to clients. This could even become a key competitive advantage to attract and retain the greatest professional talent in the marketplace, which will further help grow your firm to new heights.

Are you ready to make secure cloud storage central to your organization? Join the MinuteBox revolution so that your team can modernize entity management, improve workflow efficiencies, and help deliver even greater value to your clients.

Corporate growth is monitored and reported on through the documentation of revenue, profitability, and capital transactions. Tracking inbound revenue and net profits, after deducting expenses, is relatively straightforward and can be maintained using basic accounting principles.

Maintaining accurate records becomes more complicated for capital transactions. Whereas tracking business revenue is a matter of documenting the flow of cash into the company bank accounts, monitoring capital transactions involves keeping track of things like:

• The sale of share capital
• Maintenance of shareholder ledgers
• Long-term debt capital payments
• Purchase or sale of fixed assets under the company’s ownership
• Capital gains taxes owed from the transaction

A corporate record of each and every one of these transactions is necessary for proper recordkeeping. Due to the potential complexity of these transactions, documenting official records is a very arduous and time consuming process. However, entity management software can simplify that process, accelerate the workflow, and maintain all accurate information for the official record.

What needs to be recorded in a capital transaction

In most instances, there are two phases to complete a capital transaction. The first phase is when capital is formally authorized, and the second phase is when capital is officially issued.

During the authorization phase, it’s important to record exactly what type of capital has been permitted. You need to show the intended transfer of ownership of the asset itself, and many of those options fall within the following asset classes:

• Equity in the company
• Stock options for shareholders
• Use of restricted grant funds
• Issuance of mutual fund units
• Issuance of stock warrants
• Authorized usage of fixed or non-fixed convertible securities

The issuance phase of the transaction documents on what date and at what value the transaction was completed. All of this information should be reflected in corporate records so that the company’s financial statements are legally accurate for all shareholders to review.

Tediousness of capital transaction recordkeeping

Keeping track of all of those transactions is a time consuming affair, especially since it requires tracking both the authorization and the issuance of capital. You’ll need two separate sets of records to show the completion of the transaction and maintain accurate record books.

Documenting, storing, and sorting all of these corporate records is one of the most time consuming duties undertaken by a law firm working on behalf of corporate clients. Law clerks or paralegals have limited time to focus on boosting Legal Recurring Revenue for the firm if the majority of their time is spent documenting corporate transactions of all existing clients.

What if there was a way to expedite the process, essentially eliminating the need to write out the same records twice to complete a corporate transaction? What if you could digitize the entire process and give your legal professionals more time to focus on growing the firm?

Entity management software modernizes capital transaction documentation

Rather than continue with the old ways of tracking capital transactions, you can use entity management technology to improve the process. Platforms like MinuteBox simplify the entire recordkeeping process and uphold the strictest enterprise security standards. This ensures all corporate entity information is kept secured with complete confidentiality.

Let’s say the corporation your firm represents authorized a convertible loan. A record needs to show that the loan was authorized and then issued once the capital officially moves from one account to another. Your legal team may even be required to document rarely used capital structures like SPACs or entities that include stock warrants, mutual funds, and even equity.

With MinuteBox, inputting and storing any of these records can be completed in a matter of minutes. All this information is stored and tracked in the platform itself, which means you don’t have to manually input the same information to create an issuance record following the authorization record. Instead, you simply pull in the information from the authorization record with no need to repeat the information.

Additionally, you can create standard templates for commonly used capital transactions. This way, you can apply those records to an entity and reuse them throughout any of the entities that you are managing within the platform.
Are you ready to use a much simpler process to document capital transactions? Join the MinuteBox revolution so that you can document all capital transactions with pre-built templates, save hours of valuable working time, and maintain digital security all within one secure platform.