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Every legal entity is a business and, as such, every entity has specific business needs. From increasing the client portfolio and boosting Legal Recurring Revenue, onto streamlined operations and more efficient workflows; every legal entity has needs that must be met.

Fundamentally, the purpose of any legal entity is to deliver value to clients in order to earn repeat business from those clients. Client satisfaction improves client retention rates, which are vital to boosting Legal Recurring Revenue for the legal entity.

Among the most important needs for any legal entity are the need to maintain transparent business records, as well as the need to manage the all-encompassing responsibilities of day to day responsibilities for the entity. Responsible entity management and practice management are vital objectives for any legal institution to be successful.

What are legal entities?

Legal entities are defined as corporations, partnerships, trusts, and other forms of business entities. They enter into legally binding agreements as vendors, suppliers, or purchasers of goods and services, so that they may conduct their business.

Legal entities have corporate responsibilities to their owners, shareholders, and even various levels of government. A legal entity assumes the obligations of the contracts with which it enters, including agreements to borrow money, pay off existing debts, deliver earnings reports to shareholders, and submit business tax filings.

A legal entity can also file lawsuits, and may be named by other parties as a defendant in a lawsuit. Depending on the ruling in such a lawsuit, the legal entity may be financially responsible for the results of those legal actions.

What is entity management?

Entity management refers to the process undertaken to manage legal entities. In a nutshell, entity management describes how a corporation maintains records of vital business information in an orderly system to ensure the business remains in compliance with federal, provincial, and/or state laws.

Examples of entity management in practice include diligent records of minute books and corporate documents that report a company’s current and projected financial standing. The purpose of entity management is to ensure the corporation lives up to their responsibilities and obligations to owners, shareholders, and governments.

What is practice management?

Practice management describes the process of managing all business priorities to keep the legal entity running smoothly. Effective practice management enables legal entities to deliver on their primary objective of high client satisfaction rates.

When broken down, practice management encompasses everything from:

• HR management
• Finance and accounting
• Business development
• Technology procurement
• Commission structures
• Conflict resolution
• Client communications
• Working time management

Essentially, practice management is a process that improves collaborative workflows among all professionals employed by the legal entity. When practice management is implemented smoothly and efficiently, all business priorities are effectively managed. As a causality, a respectful amount of time and resources can be dedicated towards diligent entity management, evidenced in the form of up-to-date, accurate and transparent corporate governance.

How to use software to manage legal entities

Software and technology procurement are important aspects of effective practice management. Entity management software is one of the most important pieces of technology a legal entity can acquire. Why is it so important? Selecting the right entity management software delivers an effective, efficient, and innovative process to modernize entity management.

A cloud-based entity management solution provides an abundance of business value to a legal entity. All minute book records and/or corporate documents are uploaded into the cloud using the platform’s capabilities. There are many benefits to this approach, but two of the most significant deliver the greatest value to legal entities.

A cost and time efficient corporate record review process

First of all, as cloud-based software, all records uploaded into the platform can be viewed from anywhere in the world. As more executives embrace remote or hybrid work, a solution that enables your legal entity to service those clients at their convenience is far more likely to achieve high client satisfaction rates.

Suppose your legal office is based in Toronto, and your client is based in Berlin. Rather than arranging time to fly over to Berlin for an in-person meeting (an expensive flight, mind you), the entire review process can be conducted online. Your client can retrieve the records at their own convenience, or you can arrange a virtual consultation and use advanced search filters to bring up the records in a matter of seconds. Suddenly, an entire day or potentially two days of time to conduct that review is completed in one thirty minute session.

Troves of working hours to reinvest into growth strategies

Secondly, entity management software enables legal professionals to make more efficient use of their own time. Practice management skills teach professionals how to streamline their own workflows, and an entity management solution is one of the best ways to earn back valuable working time for all legal entity employees.
Some legal entities spend as much as $20k per year, per employee, simply to manage physical binders of minute book records and corporate documents. By modernizing the entity management process, all of that time and money spent on clerical tasks is substituted by the platform itself. As a result, all employees can reallocate their own time towards growth strategies that further the interests of the legal entity.

The Corporate Transparency Act (CTA) is part of US federal legislation that outlines how corporations, limited liability corporations, and other legal entities are required to report information about their beneficial owners. The law is enforced by the US Treasury’s Financial Crimes Enforcement Network (FinCEN) as part of a broad government effort to crack down on illicit financing and enhance corporate transparency.

Compliance with the CTA is mandatory for corporations subject to the terms of the law. Failure to comply with the act will result in steep penalties. Deliberate false reporting or fraudulent activity can result in fines of up to $10,000 to the owners of the corporation, and the possibility for two years of incarceration in federal prison. The CTA does allow penalties on false or misleading statements to be corrected if the controller who submitted the initial reports files a supplementary amendment within 90 days.

FTX: a case of corporate transparency gone wrong

Before diving into the specifics of entity corporate compliance, let’s first pull the bad apple out of the bunch. Here’s an example of how not to comply with the laws and risk financial bankruptcy.

FTX is a cryptocurrency trading firm that made recent headlines for mismanagement of their corporate finances. FTX founder and former CEO Sam Bankman-Fried triggered a global cryptocurrency crisis when it was discovered that customer funds had been misappropriated by funneling up to $4 billion of customer purchases into self-directed entities, operating in conjunction with FTX. Bankman-Fried’s alleged intent was to rescue his established trading firm, Alameda Research, from collapse amid higher costs imposed by rising interest rates.

Bankman-Fried was forced to step down from the company in November 2022, and John Ray III was appointed the new CEO of FTX in the wake of the company’s filing for Chapter 11. In a submission to a federal bankruptcy court, the new CEO described FDX’s corporate controls as “a complete failure.”

According to the information provided to the courts, FTX had 30-40 self-directed entities operating under FTX Group. The corporation is officially headquartered in the Bahamas and registered to conduct business in the United States.

However, many of the self-directed entities, particularly those in the Bahamas and other Caribbean countries, had no corporate governance or entity management in place. Some of the entities never established a Board of Directors, and they never had an official board or shareholder meeting. As a result, the lack of corporate structure created problems when due diligence was conducted by rival crypto exchange firm Binance, which intended to purchase FTX before discovering the extent of corporate malfeasance that occurred under Bankman-Fried’s tenure with the company.

What you need to know about complying with FinCEN

The FTX scandal has shed greater light on the need for corporate transparency and accountability across all sectors of the economy. Investors are entitled to know the truth about a corporation’s financial performance, and the purpose of legislation like the Corporate Transparency Act is to hold these corporations accountable.

Corporations designated as “reporting companies” under the CTA are bound by the legislation. A reporting company is a corporation, limited liability corporation, or other legal entity that has filed a corporate charter with the Secretary of State.

A corporate charter is part of the incorporation process in the United States, which describes how government regulators can contact representatives or shareholders of the corporation. Foreign-based corporations must also file a corporate charter to legally conduct business in the United States.

The purpose of transparency for reporting companies

The federal government enacted the CTA to crack down on corporate fraud, money laundering, and other financial crimes that cost the United States millions in lost tax revenue. The directive for FinCEN is to hold reporting companies accountable.

There’s also a practical business case for each reporting entity to comply with the mandate, aside from the fact that it is enforceable law with significant penalties for violating those laws. Corporate transparency reports submitted to federal regulators include structured organizational charts that illustrate the hierarchy of ownership and responsibility for the corporation.

These organizational charts allow corporations with sub-entities or complex corporate structures to provide a transparent representation for accountability. Org. charts expedite decision making by showcasing which parties are ultimately responsible for calling the shots.

Who is a “beneficial owner?”

Under the CTA, a beneficial owner is defined as any individual who has a legally binding contract to exercise substantial control over the corporation, or is recognized as a shareholder with no less than 25 percent of issued shares.

Proxies who act on behalf of shareholders are not recognized as beneficial owners of a corporation. Creditors owed debts from the company, as well as employees with small percentages of ownership in the corporation are also exempt from the terms of the CTA.

What information must be reported to FinCEN?

Unless special exemptions are administered to a corporation, the company must submit a detailed report to the Director of FinCEN. The report will contain personal information about each beneficial owner in the corporation, which includes:

1. The full legal name of the beneficial owner
2. Their recognized date of birth
3. Current residential address and the address of their business (if separate from the residential address)
4. Identification number from a document issued by a state or local government, such as a passport number, driver’s license number, etc.

The information supplied to FinCEN must be current and accurate. If personal information about any beneficial owner changes, the corporation is legally required to submit a supplementary report with the updated information no later than one year after the changes have been made.

How subsidiary management software helps corporations avoid repeating the FTX scandal

Subsidiary management software assists corporations with financial transparency, organizational structuring, and minute book management. Corporations that use subsidiary management software maintain accurate and diligent records, enabling accurate reporting to FinCEN with no hassle.

With subsidiary management software, corporations can document exactly where they’re domiciled in the US, or in a foreign country. If the entity is foreign-based, filings that document the corporation’s right to conduct business in the United States are easily accessible.

Subsidiary management software includes built-in organizational chart templates that can be populated with the names and titles of beneficial owners. The platform also includes templates for documenting Boards of Directors, corporate committees, and even shareholder ledgers to document the issuance and transfer of shares among beneficial owners.

One of the contributions to the FTX scandal was that no due diligence had been conducted on the investors who became beneficial owners in the corporation. The lack of corporate governance and org. charts meant that venture capitalists would make investments without accountable oversight of the other investors. The lack of transparency meant the cash flow in the company was never fully reported.

Subsidiary management software prevents other corporations from falling into the FTX trap. All monetary transactions are recorded in diligent corporate records. Investors and other venture capitalists are recorded as beneficial owners of the corporation, allowing the company to remain transparent and accountable with federal regulators.

Can your corporation benefit from subsidiary management software? Join the MinuteBox revolution for a modernized approach to corporate governance and transparency that will keep federal regulators well-informed and out of your business.

Paralegal teams are the secret weapon of any law firm. Paralegals, or law clerks, are often tasked with some of the most important assignments to build a winning case for a firm, which include any or all of the following:

• Case planning and development
• Fact finding and legal precedent research
• Drafting correspondences among all parties
• Scheduling court dates or negotiation meetings
• Documentation of minute books and meeting records
• Coordinating conference calls with clients
• Analysis and summarization of legal findings
• Fact checking any notes from opposing counsel

The common skill necessary to execute each of these tasks efficiently is time management. For professionals in all backgrounds, time management is how individuals use available hours in a given work day to complete required tasks as efficiently as possible.

What time management means to a paralegal

Paralegals define time management similarly to other professions, but they measure success in different ways. A time efficient paralegal judges the success of his or her efforts through two key metrics: greater client satisfaction and contributions to Legal Recurring Revenue for the firm.

Time efficient paralegals form outstanding client relationships

The first way to measure the success of a paralegal’s time management skills is the net effect on the relationship with the client. Interpersonal client relationships are vital to a firm’s ability to retain satisfied customers as well as to grow the size of the business.

How does a paralegal establish positive interpersonal relationships with clients? Customer satisfaction is achieved by appealing to and assisting with the unique needs of your clients. Fulfilling those needs requires paralegals to speak the language of their clients and to understand what clients expect from the firm.

Case in point: 77 percent of business owners want to be able to access files remotely. The convenience of using technology to review minute books, corporate records, and other important documentation from the convenience of any location has become more important than ever for business leaders everywhere. Paralegals that understand this expectation and have the ability to provide that service have much greater potential to sustain long-lasting, and lucrative relationships with clients.

Time efficient paralegals have more time to support the firm’s growth

Paralegals with excellent time management skills are more likely to help build a particular case faster and more efficiently. As a result, these paralegal champions will have more working hours in the day to source or prospect new companies with the potential to become valuable new clients for the firm.

Here’s another interesting statistic: professionals spend nearly half of their days searching for information. In fact, it can take up to 18 minutes to find one document or minute book record when those files are stored in paper format. Due to the amount of paperwork a firm produces for each individual case, it’s no surprise that sorting through those files takes up a sizable amount of a clerk’s time.

What if there was a better way to sort through and manage all of these records? If clerks didn’t have to physically go through each file, they could dedicate more time towards growing Legal Recurring Revenue for the firm. On top of that, more efficient ways to comb through all of those records means clients get their answers much faster, thereby improving client satisfaction.

Entity management software is the time management solution you’ve been looking for

So what is the best way your firm can empower your paralegal team with efficient solutions that will help them manage their own time effectively? The answer lies within entity management software, which vastly accelerates corporate recordkeeping management to help paralegals earn back more of their own time.

Entity management software allows paralegals to centralize all minute book records and manage subsidiaries to support all client needs. Platforms like MinuteBox offer no-code document assembly, meaning firms no longer require extensive IT teams to manage digital corporate records. Instead, enterprise grade scanning services are built directly into the platform’s core capabilities, enabling paralegals to upload all minute book records within a matter of minutes.

Entity management software also allows paralegals to maintain and manage up to date shareholder ledgers with speed and proficiency. Any transactions between a client and their shareholders are immediately documented using a series of pre-built fields to track the date, time, value, and recipient of a shareholder transaction. This allows all parties with access to the shareholder ledger to remain up to date on the current financial status of the company.

On top of all of these benefits, platforms like MinuteBox help law firms position themselves as modern, innovative, and effective providers of quality customer service. Each of these traits help establish and cement a firm’s brand reputation, which is all the more valuable when prospecting new companies with the potential to become lifelong clients.

Are you ready to help your paralegal team become the most time efficient group of professionals in the industry? Join the MinuteBox revolution so that your paralegals become the best time efficient managers in the business and contribute to the future growth of your firm.

There are many business benefits derived from digitizing your company minute books and corporate records. Centralizing all company records in one convenient location makes storage, data oversight, and entity management easier for your team than ever before.

Entity management software allows you to digitize your entire roster of minute books. By scanning your recorded documents, you can upload your entire portfolio of minute books into a cloud-based platform that functions as a centralized hub for all of your legal entities.

Benefits of digitizing your minute book records

When you digitize your minute books, you demonstrate to clients and legal professionals alike that your business is a firm that embraces innovation. Not only does this create an impressionable brand identity for prospective clients, you can even leverage this commitment to help attract high quality talent to join your organization. Today’s professionals are excited by the potential of innovative solutions so use your investment wisely to attract more talent.

Your team will also benefit from the platform’s capabilities in many other ways, including:

• Cost savings on overhead office expenditures. Since you’re storing fewer physical minute book records, you can reduce the number of filing cabinets in your office space and convert the financial and space saving perks of that decision into other benefits for the firm. Plus, you have the convenience of one central hub with infinite storage space.
• Faster and convenient ways to find important records. Over three quarters of surveyed business owners say they want access to important files from remote locations. Entity management software allows all parties to access official minute book records anywhere with the ability to unearth specific files in a matter of seconds.
• Backup of important files offers failsafe protection. There’s always the risk that physical minute book records could be lost or misplaced. When you digitize minute books, the platform has built-in backup capabilities to ensure all files remain accessible, organized, and ready for use at any given moment.
• Higher ratio of satisfied clients that help boost referrals. Word of mouth and referral business are two of the most cost effective ways to generate growth for your firm. When you give existing clients the answers they need in time efficient ways, they’re far more likely to recommend friends or fellow entities to your organization. This could be a great way to invest in the growth of your business without the expensive nature of aggressive advertising campaigns.

How to digitize minute books with entity management software

When using entity or subsidiary management software like MinuteBox, you’ve made a commitment to transform your physical minute book records into sophisticated digital legal documents. Now, you need to know how to go about completing that process.

To help with that, here is a brief overview of what that uploading process will look like for your business. By following these steps, you can digitize your minute books and start earning those previously mentioned benefits for the further growth and development of your own business.

Create an organizational hierarchy for all minute book records

Before the uploading process gets underway, create a structured outline for how to incorporate the software with your existing documentation process.

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How will you share important data from the platform?

In most cases, there’s a limited number of people who require access to the pertinent legal information in your account. Your internal team of legal professionals and paralegal experts will oversee the records in the account. Additionally, your clients, specifically key points of contact, should have access at their convenience.

In what way will you store and organize minute books within the platform?

You can decide how to centralize your minute books in the cloud. In what way should information be sorted as you organize and standardize your uploading process? Are there particular records that deserve more prominent positions within your hierarchy of minute books? Decide what is the best approach to upload all of your information and stick to that process as more records are uploaded into the platform.

Which metrics will quantify the value of the software when reporting on results?

Measurement of success is always vital when evaluating the merits of a new piece of software. Decide how you’ll measure success. Is it strictly through cost savings, or will you quantify the time and resources saved by the convenience of centralizing all your minute books to calculate the value? Select those key metrics and analyze the results to report on the overall success of your venture into the cloud.

What do you hope to achieve as an organization by using the platform?

Know your goals: that’s imperative to any decision and means of defining success. How can the platform help you fulfill your goals and make you look like a hero to your superiors in the business? If you know what you’re trying to achieve before setting out to make the effort, you’ll be able to measure the effectiveness of the technology and report on it appropriately.

Are there any product features (i.e. additional security, convenient workflows, customer service) that can improve your experience with the platform?

Finally, you should know what product capabilities are most appealing to your business needs. Can the platform do everything it’s advertised to deliver, and what are the features that make your work life easier? Make sure you learn about the intricacies of the platform during the discovery process. This will make it far easier for you to quantify success.

Establish an upload checklist to inventory all existing minute books

It’s easy for physical minute book documents to be lost or misplaced. When undertaking the process to digitize minute books into your entity management account, create a checklist of accountability to ensure records are not lost during the uploading process.

Outline who will be involved in the digitization process, and at what stage their involvement will commence and/or be complete. This way, you have a formal trail that highlights where, how, and with whom each corporate record is overseen as you complete the process to digitize minute books. It keeps all parties accountable and ensures no files are lost as you complete the journey from paper to digital minute book records.

Begin the scanning process to upload minute books into the platform

The actual scanning of minute book records could be completed by your internal legal team or with the assistance of MinuteBox’s team of scanning professionals. The process can be completed on-site at your office and at your own team’s convenience.

Using MinuteBox’s smartOCR, a state of the art and secure digitization process, all minute book records are scanned into the platform and organized based on your mapped out structured requirements. This ensures your company transitions to a modern and innovative workflow that securely and efficiently manages all records with the highest quality standards.

One of the best parts about the MinuteBox process is that, yes, you do have the option to complete the uploading, sorting, and organizing process yourself. However, we have a team of experts who can take the lead on your behalf to complete the work. It’s very likely that the MinuteBox team can finish the uploads faster, more efficiently, and more accurately.

Easily review all records with MinuteBox’s entity information summary

Functioning as a built-in dashboard for all legal entities, the MinuteBox entity information summary is the most advanced overhead view into all corporate and entity records in your account. Using pre-built dynamic fields to search and sort through all of your entities, you can customize how records appear in your entity information summary to manage even the most complex corporate records with speed and convenience.

Are you ready to digitize minute books and help your company become more legally innovative? Join the MinuteBox revolution so that you can upload all minute books and corporate records into one secure cloud-based platform for easier file storage, faster data management, and improved interpersonal client relationships.

One of the steps in the articles of incorporation for a new company is the transfer and issuance of new shares to shareholders. The issuance of shares to shareholders documents the various owners and investors in the company, alongside the percentage of the business they can claim ownership towards. This can also be done using cap tables, which track the capitalization of the company and who owns what percentage of shares.

Documenting the transfer of shares establishes a new regime for the transfer of public securities among the listed shareholders. It’s intended to eliminate much of the expense and delay prevalent in the securities industry by establishing a central depository for all corporate securities. New rules establishing how to redeem outstanding shares can also be documented.

Since this is a vital step in the incorporation process, it’s necessary that all corporations create their own shareholder ledgers to document this information. Traditionally, it has been a time consuming and tedious process. Therefore, is there any way to more efficiently track transfers of corporate shares among shareholders?

How to create your shareholder ledger

A shareholder ledger is the best resource to keep track of all issued shares to a corporation’s various shareholders. It allows for a smooth and accurate tracking of all shares issued by the corporation to each individual shareholder, and it’s also used to monitor the transfer of shares from shareholders back to the corporation.

We’ve created a helpful guide on how to create the perfect shareholder ledger to help you create the outline of one for your own corporation. This will give you an idea of what to include in your shareholder ledger so that you correctly follow all of the requirements to incorporate your business within Canada.

5 ways to efficiently track transfers of corporate shares

Once you have your shareholder ledger firmly established, you can keep track of all share exchange transactions in a diligent manner. But what are the various ways you can go about doing this work? Here are the five most common methods with some proving to be more efficient than others. Have a review and decide what’s best for you.

Paper records and written documentation

In the old days, the only way to keep track of shareholder transactions was through a registry notebook. Companies keep their shareholder registry locked in the corporate office space to ensure it remains safe and securely under lock and key. Each time that shares are issued or transferred among shareholders, a new record is added into the registry.

The good thing about this approach is it’s very traditional, and every party involved will know exactly how to read records in the shareholder ledger. The bad news is that because it’s such an antiquated system, it’s very time consuming and tedious for legal professionals to do. Too much time is lost to administrative work that can otherwise be spent on billable hours with new or existing clients.

One office computer as master of all records

If you’ve moved on from paper shareholder ledgers, that’s likely a step in the right direction. Some companies have only begun the initial stage of this journey by transitioning to digital recordkeeping on one secure office computer. In this scenario, records are maintained in an Excel spreadsheet to track the transfer and issuance of any new shares.

The good thing about this approach is that it is more secure than paper transactions, and there’s significantly less risk that documentation will be lost or misplaced. The bad thing is that it limits accessibility to the shareholder ledger. Only people who log onto that specific office computer can view the records in a convenient manner.

Spreadsheets shared with all shareholders

The next step beyond keeping files on one office computer is to pass them around with all shareholders. Spreadsheets built within Excel can be sent to all relevant parties. This way, all shareholders can view the current capitalization of the company whenever they choose.

The good thing about this approach is that it’s far more transparent as all relevant parties can receive copies of the master file and plainly see the numbers for themselves. The bad thing about this approach is that it doesn’t allow new or updated records to be viewed as conveniently. A new transaction may occur before an updated spreadsheet is passed on, leaving shareholders unaware of the exact state of the company’s capitalization.

Send all information via email

In some cases, companies may do away with a spreadsheet altogether. Any issuance or transfer of corporate shares is communicated via email in one message that highlights the most recent shareholder transaction(s).

The good thing about this approach is that information can be delivered to all shareholders, and they can store the messages in their inboxes or in one manually created file for their own records. The bad thing is that this is a very non-secure approach. Emails can be lost, forwarded, or even corrupted on the web, potentially exposing private shareholder information to the public.

Entity management software

Modern entity management software simplifies the entire process of issuing and tracking shares among all shareholders. You can use the technology to easily report share exchanges in a secure database, document all relevant information about the shareholders in notable fields, and record the value of all corporate ledgers in secure cloud-based registers.

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The best part is that all shareholders can have access to the digital ledger, ensuring everyone is up to speed on the latest issuance or transfer of shares. This allows decisions by the board to be made in more efficient and prudent manners. You can learn more about how to track shareholder transactions with entity management software here.

White collar crime is a very costly affair in Canada. According to Criminal Intelligence Service Canada, which shares and coordinates criminal intelligence shared between different police agencies, white collar crime costs the country up to $5 billion per year.

Naturally, governments across the country are eager to crack down on these crimes. One of the ways this was done was an amendment to the Canada Business Corporations Act in 2019. The amendments mandate that corporations must provide greater transparency over shareholder equity in their businesses, as well as assist authorities to prosecute financial crimes.

The federal law was adopted by several provinces over the past three years, including British Columbia, Manitoba, and Nova Scotia. As of January 1, 2023, Ontario, the largest province in Canada, will enact its own version of the law.

What the OBCA amendment means for business

The OBCA is the Ontario Business Corporations Act, which has a similar mandate to the CBCA at the federal level. The Ontario government updated the OBCA with rules that enforce similar priorities for corporations to follow as the federal law.

Under the new OBCA legislation, corporations headquartered in Ontario must create and maintain an ISC register with updates reported on an annual basis. An ISC register is a document that lists all of the individuals with significant control (ISC), ensuring all key stakeholders comply with the law. The purpose of the OBCA, and its federal counterpart, is to support a Canada-wide effort to crackdown on white collar crime, particularly tax evasion.

Other provinces have enacted similar legislation of their own, following the lead of the federal example. Quebec has created its own legislation in Bill 78 that’s similar to the CBCA laws, though it has slightly different guidelines for corporations to follow. You can learn more about Quebec’s Bill 78 here.

Who fits the profile of an ISC?

Who exactly is an individual with significant control in a corporate entity? In most situations, an ISC is a registered shareholder with shareholder rights who controls at least 25 percent of the voting rights attached to all outstanding corporate shares. The language in the law also applies the ISC label to any shareholder whose influence, if exercised, could in fact control the decisions made by the corporation.

There are some exemptions to how the ISC classification is applied. For example, if a shareholder is an investor for a purely commercial relationship, reflected in the form of a franchise, license, lease, or some other managerial agreement, their involvement in the corporation’s affairs is considered an “arm’s-length” affiliation. For that reason, that investor would not classify as an ISC.

What needs to be included in an ISC register

Under the OBCA laws, an ISC register must be maintained and updated by a corporation as part of its annual financial statements. However, what exactly needs to be included in an ISC register to comply with the law?

Most of the information in an ISC register is identical to information that most corporations maintain in a standard shareholder ledger. This includes personal information such as names, addresses, dates of birth, and jurisdictions.

There’s one key difference between an ISC register and a standard shareholder register. The difference is that corporations must include the date on which an ISC became an ISC shareholder, and a description of how that individual meets the criteria of an individual with significant control in the corporation.

How to use entity management software to file ISC registers

If your corporation is based in Ontario, you’ll need to create an ISC register to comply with the law. Now, you may be an established corporation with a detailed shareholder ledger, which you can modify with little hassle. But what if you’re a new corporate entity? How do you create a new shareholder ledger without sacrificing laborious hours of your paralegals’ time and energy?

The best approach is to use entity management software to streamline your corporate recordkeeping process. Platforms like MinuteBox have a built-in shareholder register template in our Entity Information Summary that you can use to build out your register, and you can include any required details to highlight investors that fit the ISC profile.

Under the Entity Information Summary is a subsection called the Capital Section. Here, you can input all authorized information about shareholders and corporate transactions in the available open fields.

You might be asking the question: how is this going to save your legal team precious time and manpower? MinuteBox utilizes document automation technology that requires no coding or coding experience to work the platform. It allows your team to work faster but still meet all of the legal criteria necessary to remain in full compliance with both federal and provincial laws. Simply open up the platform and the work can be complete within minutes!

Are you part of an Ontario-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.