We enjoyed some solid summer weather in the first half of September, but as temperatures and daylight begin to decrease and it feels much more like autumn it’s time to turn our eyes to Q4. Very soon that end-of-year craziness will be upon us, but the steps we take now can help to put a little control on that frenzy. Q4 is typically an extraordinarily busy time as CEOs and Finance teams seek to close deals before the end of the year.
In between end of summer vacations and getting kids back to school, many corporate Legal and Tax departments began working hard on transactions due to close during Q4. Before things hit critical mass, this is a great time to take stock of existing resources and audit entities.
Getting caught at the 11th hour with entities not properly qualified, licensed or maintained can substantially increase deal costs and stress. Now is the perfect time to perform an audit on business entities and clear any issues:
- Will good standing certificates need to be ordered?
- Multiple state filings made?
- Have officers and directors been properly elected?
- Do LLCs have current and effective operating agreements in place?
- Are all entities properly qualified in the jurisdictions where they conduct business?
- Have all local jurisdictional requirements been met so that entities are in good standing?
And equally important is determining if internal resources are being diverted away from daily responsibilities to handle the influx of short-deadline deal work. Ongoing filing and entity maintenance deadlines can quickly fall by the wayside when there simply aren’t enough hours in the day for internal staff to get everything done. Conversely, outside counsel invoices can quickly swamp a corporate legal department budget if there are aren’t sufficient internal, or cost-effective external resources available to keep work in-house.
With a little investigation and planning, corporate legal departments can manage workflow and budgets without burning out internal personnel, and be able to effectively manage the closing process so that everything runs as smoothly as possible with no surprises.