When you have a complex corporate organizational structure, it doesn’t take long for your contract management to become equally messy — especially if you struggle with document organization in general. We have a quick guide for complete contract management in every aspect of your business, and managing your business entity is an important part of that.
Business entities can get complicated quickly. They can include recent mergers and acquisitions, especially in the tech industry, as well as different subsidiaries in different companies. You want to be able to keep up with and access the contracts that are relevant to each area of the business. But they also need to stay separate. Managing business entity and subsidiary documents can pose a challenge. But you don’t have to live with a messy organizational system that can make it difficult to locate individual documents or lead to contracts falling through the cracks. Instead, try some of these suggestions for managing your contracts. Even a complex organizational structure can be easy when you’re fully utilizing your contract management software.
1. Maintain clear parent-child organization.
Set up your system so that you can clearly see the “parent” company and the “child” companies. Do you work for a large company that is going through several mergers and acquisitions? Then you could end up with several child companies beneath the parent company’s structure. Each one needs its own section within the greater whole.
Often, your newly-acquired companies will continue to function the same way they always have. Most likely, they will also need to fulfill the terms of the contracts they held when you acquired the company. When the time comes to renew or renegotiate those contracts, be prepared for turbulence. You may need to meet many of the same terms the original company held in order to keep those clients. Alternatively, you may need to start the process early to switch them to a new service agreement. In either case, a clear parent-child organizational structure can make it easier for you to keep up with individual contractual templates and terms. You will also know who is responsible for fulfilling the terms of a given contract, while still keeping up with those contracts under the larger corporate structure.
2. Make sure each contract has the correct entity address and contact information.
Each contract template should begin by establishing which entity bears responsibility for a given contract and its terms. This could be the first drop-down menu on your contract template: a selection for the specific entity responsible for the contract. You can also use separate access for salespeople and negotiators for each company. This will help keep those contracts separate from those related to the rest of the business. Access control and data integrity measures can also help ensure that employees of each specific company or subsidiary cannot access contracts related to the others unless they have a valid reason to do so.
By clearly attaching the right entity address and contact information, you ensure that clients can easily get to the segment of the company they need when they have questions or concerns.
3. Attach all relevant business entity documentation with acquisition contracts.
When you acquire a new business, you need all the business entity documentation that goes along with it. This could include the documents that authorize an entity to complete business in a given state as well as any other documentation related to the business. Attaching that documentation makes it easier to access or produce it as needed.
4. Establish the states or countries each entity can do business in.
Your contract management software can help ensure that each entity remains in compliance. For many companies, not every entity can do business in every state or country. Set up your software to automatically direct contracts through the correct entity when needed. In some cases, especially if a client approaches the parent entity, you may need to clearly indicate which subsidiary bears responsibility for executing a given contract. Our contract management software allows you to clearly establish where each entity or subsidiary can do business. This way, you can keep your contracts straight and remain in compliance.
5. Set triggers for completing requirements.
When you acquire a new company or open a new subsidiary, you may need to complete specific requirements before that acquisition is complete. This may include publishing a list of company assets, for example, or filing your paperwork once those requirements are complete. Our contract management software can set up triggers that remind you to take care of those requirements. This helps ensure that you don’t miss out on anything. You can also set up workflows to put the proper documentation at your fingertips when you need it. You can also set triggers to:
- Obtain the right signatures.
- Check that you’ve met deadlines.
- Move contracts further through the management process.
When you have a complex business structure, effective contract management software is critical to ensuring that your business continues to move forward smoothly. By correctly utilizing that software, you can keep with all the complex elements of those contracts. Also, your team can keep them separate from one another where needed. Smart software can even provide the triggers and reminders each individual within your business needs to keep up with contractual obligations. Schedule a 1:1 demo to learn more about how ContraxAware can help you manage your business entity obligations, documentation, and structure.