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Top 3 Reasons to Centralize Global Subsidiary Governance

Amid constantly changing rules and regulations, the last thing multinational organizations need is staff bogged down with compliance and corporate secretary tasks. These organizations have complex needs when managing subsidiaries. We explore why effective legal entity management can create efficiency, decrease risks, and free up teams to focus on growing their business.

The issue multinational organizations face with compliance management

One of the biggest challenges corporate legal departments face is staying up to date with all the local regulations that impact their global entity portfolio. The administration involved is not only time-consuming—it requires specialist knowledge. Juggling this with other corporate legal matters—all with set deadlines across multiple time zones—can hugely increase workloads at a time when in-house legal teams are also struggling with reduced headcount.

As an example, when corporate changes take place—such as director changes, changing company names, changing entity type, amongst other things—documents need to be submitted and updated to reflect those changes in commercial registries. These requirements differ across jurisdictions—and can change overnight.

Time zones, language, and culture can add another layer of complexity, especially when the project involves multiple entities globally. And if businesses fail to keep entities in good standing with updated records, the number of consequences can be extensive. In CSC’s new report, The General Counsel Global Barometer 2023, respondents said the most concerning potential consequences of inadvertent non-compliance were reputation damage (58%), postponed or suspended ability to trade in a jurisdiction (19%), fines (14%), and impact on expansion elsewhere (9%).

Meanwhile, countries across the globe have made their compliance regulation more demanding and stringent, making robust legal entity management more vital than ever before.

How could streamlining entity management help multinational legal departments?

The benefits of effective legal entity management can go well beyond mere administrative tidiness. Having a regional or global portfolio of strong, well-managed subsidiaries can reduce risk, provide a clear strategic overview, and enhance business decisions while providing the C-suite with a 360-degree overview.

In the past, corporations have been reluctant to outsource legal tasks, preferring to develop in-house teams and technology. But, according to the same CSC 2023 report referenced above, those who manage legal issues internally are most concerned by cybersecurity risks (56%) and the risk of cultural or communication missteps (56%). Alternatively, the report found that those who use external providers have confidence in their legal entity management partner’s ability in areas, including expertise (4.03 out of 5; 5 being very confident), monitoring legislation impact on filings and standards (3.88), and meeting each jurisdiction’s security protocols (3.59). 

Now, another key driver towards outsourcing is the technological efficiencies on offer. The COVID-19 pandemic heightened the need to transform administrative processes—as companies moved away from manual or paper-based documentation, pushing service providers to adapt. Today, many commercial registries and government institutions use electronic filing and other modernized processes.

Why corporate outsourcing could be a smart move

Enlisting a global third-party provider enables your legal department to benefit from the expertise and economies of scale that their staff and operating frameworks can bring.

Providers now offer a one-stop-shop with the knowledge, services, and data management that clients need, while adhering to the higher standards of quality and customer service they expect. They can:

  • Receive proactive updates on legislative changes ensures business entities remain in good standing
  • Reduce governance and compliance risk, allowing companies to avoid costly penalties and reputation risk—and keep in-house teams lean
  • Streamline communication with a centralized, coordinated approach through a single point of contact in a preferred time-zone, and address urgent matters with local experts

As the industry changes and evolves, this support means that legal teams can simplify their processes and focus their efforts on more strategic work.

For more information, read The General Counsel Global Barometer 2023 report in full.


CSC is staffed with industry experts backed by award-winning technology, CSC Entity ManagementSM. We offer unparalleled depth of knowledge on all corporate governance issues. Our central operation is supported by regional contacts in every time zone and a network of specialists in over 140 jurisdictions.

CSC provides knowledge-based solutions for every phase of the business life cycle, helping businesses form entities, maintain compliance, execute transaction work, and support real estate, M&A, and other corporate transactions in hundreds of U.S. and international jurisdictions.

We work with some of the world’s largest banks and commercial lenders to reduce risk in their lien portfolios, improve their transaction speeds, and create a secure environment for their financial processing needs. We also provide solutions for secure real estate document preparation and recording.

We are the trusted partner for 90% of the Fortune 500®, nearly 10,000 law firms, and more than 3,000 financial organizations. Headquartered in Wilmington, Delaware, USA, since 1899, we are a global company capable of doing business wherever our clients are—and we accomplish that by employing experts in every business we serve.