Compliance Life Cycle: 2024 Guide to Annual Reports and Licenses

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Annie: Hello, everyone, and welcome to today's webinar, "Compliance Life Cycle 2024 Guide to Annual Reports and Licenses." My name is Annie Triboletti, and I will be your moderator for today.

So joining us today are David Jefferis, Calla Heathman, and Chi Tima. So David is a senior director of product management for Global Compliance and Governance Services at CSC in our Wilmington, Delaware headquarters office. David is responsible for driving the strategic direction of CSC's compliance solutions. David has been with CSC for over 15 years and has significant experience providing training, implementation, and consultative services to our clients of CSC Entity Management. Calla is a sales engineer that supports the Corporate Legal Services Group at CSC, and she's also based in Wilmington, Delaware. Since joining CSC in 2015, Calla has focused on business-to-business relationship management and consulting to find solutions that best fit the needs of new clients. Chi is one of CSC's License Pro sales engineers, and he is also headquartered in Wilmington, Delaware. With a robust three-year tenure at CSC, Chi takes on the role of translating client requirements, delivering compelling License Pro demonstrations, and offering support and guidance to cross-functional teams in sales, product management, and operations.

So with all of that, I would like to welcome David, Calla, and Chi.

Chi: Thanks for the introductions, Annie, and good morning, everyone. It's nice to see everyone here today. We're all really excited to really get going and providing some background and insights into CSC solutions and surrounding business licenses and annual reports. Today we're going to go through a wide array of information in regards to your annual reports and business licenses throughout the entity compliance life cycle. Then we can go over some best practices to stay in good standing and how our different solutions can support you as well.

First we're going to discuss the differences between annual reports and business licenses because that can get quite tricky a little bit. And then within each of those categories, we'll take a look at the current compliance life cycle and different impacts you have in the life cycle as well as some common challenges. And at the end, we're going to go over how CSC can help you within each of our different services and also leave some room at the very end for a Q&A session that Annie will handle.

Now before we really dive in, I just want to go over some brief information about CSC and who we are here. So CSC, we are a privately owned organization with almost 200 combined years across all of our business units. Originally CSC was established to provide legal representation and compliance services, but has been able to really evolve into being a global leader in the business, legal, and financial services. And together we provide tailored solutions and deliver world-class services in over 140 jurisdictions worldwide. So with over 7,500 employees, we offer support in every phase of the business and investment life cycle and also come with a very diverse and specialized portfolio of clients.

With all that being said, we continue to be the trusted partner of choice for more than 90% of both Fortune 500 companies and the 100 Best Global Brands. We work with over 10,000 law firms and support more than 70% of the top private equity firms worldwide. With us always keeping our clients' best interests at mind and upholding the customer promise being at the forefront of what we do, it really speaks volume to us being the business behind the business.

Now, Calla and David, would you like to get us started on the differences between annual reports and business licenses?

Calla: Sure, absolutely.

David: Sure.

Calla: So thanks, Chi, for passing that along and giving us a little bit of the background on CSC. Like you mentioned, David and I are going to dive into a few of these items here for the session. To kick things off, we are going to focus on defining annual reports versus business licenses because, like you mentioned, they can oftentimes get confused or mixed up in the world of compliance. We also want to focus a little bit on what 2024 looks like with the compliance climate and how different areas of the life cycle of a business operation can impact both an annual report and also licenses that may need to be filed. So David, to kick us off, would you like to give us an overview of the annual reports to start?

David: Sure, absolutely. And so appreciate the opportunity to speak with the folks that are joining us today and really excited to go through the content that we have to share. And so what we wanted to do is really make sure that we don't get ahead of ourselves in the presentation and provide some clear definition in terms of what we're determining to be an annual report versus what we're calling a business license. So I'll run through kind of the annual report side of things, and then my colleague Calla will kind of draw the distinctions with how we characterize what we call a business license.

So in speaking about annual reports, if you're looking at kind of the chart here, we're talking about filings that are due typically at a secretary of state or equivalent office. And so as we get a little bit deeper into the presentation, we'll talk about some of the ramifications if you fail to do this. But fundamentally why this is required is to maintain good standing.

And so when you think about maintaining entities or managing entities, there's really kind of a multitude of responsibilities from drafting consents and managing minute books and being able to create structure charts and all sorts of things. But really at its core, kind of the lifeblood of entity management so to speak is maintaining your good standing compliance because it's really sort of this critical foundational aspect of that discipline.

And so when are annual reports due? It's sort of a name for a reason, right? So it's not always strictly due on an annual basis, but that's most often the situation, and so that's sort of the cadence that you would come to expect. And when we say "annual report," that is a little bit of a general definition. In some jurisdictions, it might be referred to as a franchise tax report. For example, in the state of California, it's referred to as a statement of information. But again, we're talking about filings typically due annually at a secretary of state or equivalent office.

And then how does this impact you? Again, it's required for a multitude of reasons, including the ability to really continue to transact business as that entity. But it also has some ripple effects in terms of being able to do other types of filings with different agencies as well. So there's not just an impact at the secretary of state, but there's sort of again a domino effect of the relevance of having that good standing compliance for your company.

So with that as a bit of a definition of what we're referring to as an annual report, Calla, do you want to kind of draw some distinctions with the term that we use "business license"?

Calla: Sure, absolutely. And certainly business licenses or that term can be very vague and it's very widespread. So we always like to take a step back and let you understand what we consider here at CSC to be a business license. So here it's really the opposite side of compliance. Outside of that secretary of state registration and the annual filing, we have all of those additional licenses and permits that truthfully they're necessary to do business in a compliant manner.

So when we're thinking about where do we file and who are these licenses filed with, business licenses can be filed across all different jurisdictional levels depending on what kind of license you have or that you need. So a lot of industry-specific licenses are mandated by state authorities, some even by the secretary of state office, even though they're for a different reason. But some are also city to city or county to county. It really just depends. General business licenses for locations that you run or based upon revenue figures are also typically issued on a city or county, more local level. But ultimately, you could be filing anywhere with any or all levels of the different jurisdictions.

So why do we really have these business licenses or other permits? And most of the time it's because they're required to perform business within those jurisdictions if they're local. But again, it could be because you have a physical location or you just have revenue or clients there. They're mandated because again you sell a specific product, you offer a service, or you are plainly just doing business there.

Unfortunately, there really is no uniformity when it comes to when you file these types of licenses or different expiration dates or even how often they're due. So depending on the types of licenses you may have, they could follow many different schedules. Some are on an annual schedule, coming due every year. A lot of industry-specific licenses are due every two years. Some are even due every three years or four years in some cases. Others could be filed quarterly. And again, it truly just depends. On top of the different years you might file, there's also additional rules that you might be facing. So they could be due every two years but on odd years or on even years, every two years based upon on the date that you originally filed, or annually or biannually based upon a birth date of the person who holds the license. So it can get really confusing, and it is all over the place as to when you would normally file.

So ultimately licenses can have an impact on your business because they really can be required when you're opening new locations. It can be for expanding the footprint of your service offerings into new states or localities, not even just physically but just by offering a service. It could be just introducing something new or entering a new product area or service offering. So without a license, you may be penalized by shutting down operations, not being able to offer those things, or fines and penalties, things that we'll kind of go over a little bit later in this presentation.

So with that, now that we've really outlined and defined what annual reports are versus what licenses are here at CSC, we thought it might be important to just discuss the state of 2024 and the current compliance climate or any trends and things that we are seeing on a daily basis working with clients that are very similar to you.

There's always seasons. So alluded to this in the previous slide, when talking through expirations and when things could be due, but depending on your industry and different compliance requirements, there's just seasonality to when filing requirements are due. This means that there are periods of time throughout the year where you may experience higher volumes of filings than others. And again, there's no uniformity across entities or industries or anything. So one year you could have 80% of your filings due, and the next year maybe 25%. Or maybe you have 100% due annually. There are so many different factors that play into the seasonality behind license filings.

And also annual reports, like David mentioned, traditionally the name is annual, but again they could be on different schedules. That can also impact the seasonality that you have across your entity.

And one thing that really truly hasn't changed is something that we've been talking about for years and truthfully we will continue to talk about is just data and the fact that data is really key. We need data to be able to effectively manage our compliance requirements, again across licenses, annual reports. David alluded to just entity management as a whole. And a lot of companies that we speak with are facing challenges keeping up with just filing deadlines, again all of those seasons or different types of deadlines. So essentially having access to the data that's not necessary for tracking those items, so data like the deadlines and also any supporting documents that are necessary for filing or any of the information that you actually put on the filing and understanding the current state across your requirements is really, really key. So having all of that data present and able to be viewed is imperative.

Another trend that we've seen is just the complexity of requirements across any type of business sector. It's been impacting companies more and more, whether it be because there's expansion and there's a need to obtain additional registrations or additional licenses, or there are just new requirements that are being learned about for places where you've currently been operating. Maybe you didn't have a license before, or there was something that was brought to your attention that you didn't have. So it's becoming increasingly difficult to keep up with just what is necessary and then also the complexity behind how to get it, how do you know what you need, or where are the applications, or anything internally.

So lastly we've been working with a lot of organizations experiencing turnover. So more and more individuals are leaving the workforce really due to various reasons, like retirement, layoffs, or other additional leave. So this is leading to companies becoming a little stranded when it comes to compliance. New employees are having to take on new responsibilities that they may not have been trained on or even know what systems that are currently in place or filings that are held across the organization. So this is creating a little bit of a lack of institutional knowledge. It's making it difficult for people to keep up and keep those compliance risks at a minimum.

So now that we know a little bit about annual reports, licenses, and some of the trends in the world today, David, can you maybe walk us through the life cycle of compliance and how that can have some impacts in different areas?

David: Sure, absolutely. And so when it comes to keeping your licenses in compliance, keeping your entities effectively in compliance from a good standing perspective, it's really not a static exercise, which is what this slide will start to get into. And so I'll use a little bit of animation here to kind of go through the life cycle.

So really it starts with, of course, the formation of an entity. And so when that occurs, typically there's a registered agent that's appointed. You are hopefully going through a standard process of sorts to understand, from a licensing perspective, and maybe doing some research to understand what licenses you're obligated to maintain. And then sort of from the moment of formation, you're almost immediately thrown into what we're calling the maintain phase of the compliance life cycle, where now you have ongoing annual report obligations, you have ongoing license expirations and renewals to stay on top of.

And then, on the prior slide, my colleague Calla was talking about complexity, right? And so what folks are probably familiar with on this call is a new piece of legislation called the Corporate Transparency Act, which to be clear is separate and distinct from annual reports. It's separate and distinct from business license obligations. But it's a new series of reporting obligations for millions or tens of millions of existing entities, where for the first time they need to file reports with the Department of Treasury's Financial Crimes Enforcement Network around beneficial owners. Again, unrelated to annual report obligations and license obligations, but here we go with sort of yet another layer of compliance that you have to sort of stay on top of. And so that that's sort of a trend that we've seen for years and years, where there's just more regulation and more complexity. And so there's a lot to really stay on top of in terms of again understanding this information and being on top of when things are due where from sort of the ongoing maintenance perspective.

And, of course, a lot of organizations are very fluid in terms of it's not just one company or one location that they're managing, but they've got a portfolio of entities and a portfolio of locations where they're doing business, and they're often expanding that, right? So whether it's via acquisition or organic growth, qualifying in the new jurisdictions, opening new locations, with each of those sort of expansion moments, we are again expanding the obligations that we have in terms of maintaining our good standing compliance and making sure that we have the appropriate set of licenses, and that again we're keeping tabs in terms of when those renewals are coming due from a license perspective as well.

And then really kind of at the end, so to speak, of the compliance life cycle is sort of the end moment, if you will, for certain companies. And so I actually spoke with a client just earlier this week that happens to be in kind of the private equity real estate space, and they're with a lot of regularity forming entities that serve a purpose, but they do go through a process that a lot of folks call rationalization, where every so often they'll take a look at their entity portfolio and they'll say, "Okay, this entity was formed for a reason, but does that reason still exist?" Or, "We may be in a position where there are certain entities that we can dissolve or liquidate or terminate." And because you can look at studies that will tell you that maintaining a company from an annual report perspective, from a license obligation perspective, it comes with a cost, right? And so there's often a desire to again sort of wind up the entity and bring it to the end of that particular life cycle, which again does have ramifications from an annual report and license perspective.

So with a little bit of an understanding of the life cycle that again entities and licenses are impacted by, I'm going to turn things back over to my colleague Chi, who's going to take us through some of the common challenges that organizations often face.

Chi: Thanks, David. Now that we've just explored the various stages of the compliance life cycle, it's more evident than ever that managing those annual reports and licenses is a very dynamic and ongoing process. We're really transitioning away from a theoretical framework of how compliance management should look like versus how it actually is. And you're going to overcome a lot or go through a lot of different challenges and hurdles in this process. And we're just going to go through and name a couple of what those challenges and hurdles will look like for you guys.

One of the big things we hear across the board is not having transparency into like the entity vitals and business license records. A lot of times you'll notice that some filings are handled by different teams and due to lack of resources or coordination between both those teams and departments is where you'll see a disconnect in the transparency that is often not being relayed to the other teams.

For example purposes, like the annual reports can also maybe be handled by the legal team, while the tax and finance teams are handling the business licenses at the local city and county jurisdictions. And while both teams are handling both their own filings, which is obviously more than capable of doing, so they're not really communicating and collaborating with each other on different data points that are related to those different jurisdiction. For example, if there are any owner or officer changes that are being made at the secretary of state level and they're being made on the annual reports, it's also really important to have those changes be noted on the business license jurisdictions. And if not doing so, you're really not having clean data going in, and you're not really sure of what different things jurisdictions can do in regards to your licenses and how you are staying compliant.

And with that, just building on there, having confidence in your cleanliness of your data and how accurate your entity and business license data is. I don't know how many times I've worked with customers in this space and they come to me and tell me that they either are not tracking their information in any way, putting their full trust in jurisdictions. Side note, jurisdictions are not your friends. They really just only want your money. So putting your trust in them is not the best way because it's really putting you to act in a more reactive nature and really only depending on them to get back to with let's say renewal forms or renewal notices letting you know you have filings coming up due. And really we want you to be in a more proactive nature. So being able to have clean data, knowing when your expiration dates or due dates are coming due, that way you're able to start working on them is very important.

Going on next, the complexity of filing requirements and deadlines, at least on the business licensing side, I can say that every jurisdiction out there, and there are thousands and thousands of jurisdictions out there across the U.S., we're talking about jurisdictions from the local city levels to counties and even states, they all have their own requirements, their own deadlines. Their deadlines also all differ. You might have some licenses that expire 12/31. Some licenses expire 03/31. And they all have their own requirements of what is required. Maybe you might have a COI requirement, a bond requirement. You might have to get some tax returns and report them back to the jurisdiction. So making sure you're also able to have all the requirements, be able to get them ahead of time, and be able to be more on top of them because that also is a whole task on its own in managing your compliance life cycle. And you really want to be able to have them all at hand to help you progress within the renewal cycle.

And if you're not being able to do so, you are now going to be at a point where you're filing your filings late, and that's going to cause penalties, lawsuits, business closures. The list kind of just goes on. As those deadlines come and go and they pass through, you're going to be accruing penalties from the jurisdictions that don't ever end. They just continuously keep piling on penalties and penalties onto your renewal fees. And the one thing about these jurisdictions, when they are giving you those penalties, is they don't really stop, and they just keep going until you make it known to them that you're making the payment.

And they don't really work on your timeline, right? So if a jurisdiction comes, if they send someone out to your location for a lawsuit or to close your business because you're out of compliance, you can go and try and rectify the situation that very moment. But again, they're not going to be on your timeline. They're still on their timeline. So that could really heal for a lot of delays in your own process of what you're doing for the day-to-day operations in your real work of scope.

And then just responsibility is spread across teams or resources. I think this tackles more upon like the very first one, where I said you have different teams working on different things, and when you have that responsibility spread across different teams, you don't really have ability and insight into what is going on. And I think what a lot of our solutions we have is being able to tackle that for you guys and show you how you are able to have better insight into that because I think having insight is such a great thing to really have when you want to talk about compliance management.

David, do you want to help us go and talk about some of the consequences of noncompliance for the annual reports?

David: Yeah. Absolutely, because of the criticality of maintaining your good standing compliance, and so this slide kind of talks about, well, what would happen if we if we failed to do so. And there's a lot of things, and none of them are good. So if you look on the annual report side, which I'll cover, and then, Chi, I'll turn it over to you to maybe talk about kind of the license implications.

But on the annual report side of the house, effectively when you lose your good standing, you might initially be in a situation where you're delinquent or dormant. Eventually failure to kind of bring yourself back into compliance could get you into a situation where you are revoked, and it's really kind of a worst-case scenario, where the entity effectively is almost not in existence to an extent. And so in many cases, organizations, maybe perhaps in all cases, the reason that LLCs are being formed or corporations are being formed is to really create a level of separation between individuals that own those companies, if you will, or control those companies and creating sort of this corporate veil that folks kind of talk about. And so effectively you're losing the protections that the LLC or corporation really provides in the first place.

There was actually a really good question that came in via the Q&A, and we'll mostly hit those towards the end. But there was a question from Nicholas asking about would you generally need to file an annual report if you're withdrawing the business. And so I think the way that I would try to answer that is in order to withdraw or dissolve, effectively you're going to need to be in good standing. So if you hadn't filed a recent annual report when it was coming due and you're in a negative status, chances are in addition to penalties and fees and interest that's accruing, you're really going to have to go through a remedial process just to come back into good standing just so that you can actually wind up that entity and dissolve it. So again, you're going to find yourself unable effectively to withdrawal or dissolve an entity if it's not in compliance, not in good standing.

So it creates a host of challenges if you're maybe looking to do a merger or an acquisition or a selloff. And if your entities aren't in proper status, it can really grind a deal like that really to a halt. So it's again very critical to maintain this compliance because of the repercussions of not doing.

So with that as a bit of a backdrop, Chi, do you want to kind of talk about some of the things to worry about, so to speak, in terms of maybe not being on top of license requirements and compliance?

Chi: Yeah, definitely. So on the business license side, there are a couple of different things that can happen for consequences if you're noncompliant, right? So jurisdictions can really come and put a halt in you providing products or services depending on what you're doing. And if they're putting a halt on your products or services, it really puts your inability to even bid on new opportunities that are coming up within your own pipeline of work. They are going to come around and really going to put a knock on what you're able to and cannot do based off your licenses and if your license has been revoked or not.

Another thing that jurisdictions can do is also have a negative press impact on your business. A lot of those jurisdictional websites actually are going to portray licenses that have active licenses versus licenses that are have been revoked or companies that have their license revoked previously. And while they are in their scope to even just have that information on the website because they're not having any proprietary information on there, it's going to have a bad look on your business if you're company is on those websites with a license that is not in good standing.

And as I said before, you're going to have a lot of fines, penalties, and lawsuits are going to come down your pipeline of it's not in compliance in regards to your licenses. I know I had one customer before who was coming over and was talking with them about a fine they had, and they had a fine upward of $200,000 that they had to pay back to the jurisdiction for not having a license renewed for the past four or five years. So like I said before, those fees they don't ever keep stopping. They can continue to keep going. So you may want to ensure that you are getting those fees paid off as soon as possible. But nonetheless always trying to be in a proactive nature and working to make sure renewals are done on time.

And then, nonetheless, you're can also have your business closed. You don't really ever want that because, again, those fire marshals, those jurisdictions heads will not mind coming down to your location and putting that paper on your wall, on your window saying that you're not able to open up today or till for the next week. So we have seen that before in the past, not too often. But that is a consequence out there as well.

And not too often as well, but you can be arrested if you are out of compliance for a long enough time. On a lot of different applications they will ask you to list a person on the application, whether it is a store manager, a location manager, if it is your licensing person of interest, or whoever may be related to that application. And if they come down to your location and they are able to find that person, that person can be arrested to help remedy the situation and getting your license back into compliance. And that is just going to be one of those big measures that they're going to take to get you back into compliance and take it very seriously.

Calla: I think you might have seen this slide previous to this a little bit, and it is really that time we're shifting a little bit of our focus to just help you understand how CSC can fit into all of this and how we can help alleviate some of those challenges that you might be experiencing. I know there was a question that came through from Laura asking does CSC offer services to help with annual filings and business licenses. And that answer is absolutely, and we're going to dive into that in just a couple of slides here.

But first, we wanted to focus on at least four, there's probably more, but the four compliance best practices that are key that we have found lead to success when working with not only a compliance partner like CSC, but even managing some of this internally or that compliance process in-house. So these are really the four that we've identified that have helped our clients have success.

And so the first one being security, basically just having top-notch security and understanding where your data is and how it's being stored or used and the risk to you. It's much more important now than it ever was before with all the things we have going on with technology and all of that. So you really just want to be sure that the systems you're using and the partners that you're working with are safeguarding their corporate and even personal data, right? Some of the licenses that we work with have identifying information on them. So you really just want to ensure that the information you're supplying is being safeguarded and ensuring that again if you're using a partner or if you're using systems, they are creating additional security risks internally within your organization for that data.

Secondly here is really transparency. We've talked a lot about filing complexity, confusions on when things are due, and much more. So it's really just imperative that your compliance partner and again the systems that you're using are creating a transparent environment for you so you can always understand what's going on. But also having the ability to easily share information and store that data internally, it's very, very important to know what not only your provider is doing, but what you might need to do, and also have a place where you're able to see it all coming together, coming to fruition, and being a able to remove those questions like when is this due or was it done or whose responsibility was for it to do.

I think, David, there might have been those two others that you wanted to go over?

David: Yeah, absolutely. So centralization, this is a theme that we hear when it comes to license obligation. Certainly in the world of managing entity compliance it's the idea that you can establish a source of truth for whether you're doing it yourself or maybe partnering with a company like CSC. We'll talk more about our services in a moment. When it comes time to provide the information needed to renew that license or to file that annual report to maintain that critical good standing compliance, where do we actually go that is an authoritative source that we trust, that has all the relevant documentation, data, documents, etc. that we can really rely on?

And so we work certainly with a lot of organizations that unfortunately have a little bit of a fragmented approach, where it might be there's various spreadsheets and there's share drives and there's various stakeholders who it might not sort of be in perfect harmony in terms of who has what and who owns what. And so again having an ability, typically through technology, to have a source of truth, a central repository for all of this information is really, really critical.

And then knowledge is paramount really. And so I talked about this briefly a moment ago, but in terms of understanding when annual reports are due specifically, right, in some cases it's somewhat straightforward, right? If it's a Delaware company, we know that LLCs are due a certain time of year, corporations are due a different time of year. But as I mentioned, the fiscal year end might be a part of the mathematical equation. In some jurisdictions it's known as an anniversary filing, so based on when you formed or qualified in that particular jurisdiction, that's going to dictate when the filing is due. And it's a lot to try to stay on top of.

And then as I think our poll results also indicated not all the states are the same when it comes to annual reports. And so wait a minute. What do I need to provide here in this state versus that state? So it's a lot to stay on top of sort of on your own, and that's really where CSC can bring quite a bit to the table, which is maybe what I'll use is a little bit of a transition to talk about the services that we offer.

So we'll start by talking about CSC's annual report services, and then I'm going to turn things over to my colleagues to talk about what we're able to do from a license perspective. And I think what's going to kind of come through in my remarks and in the remarks of both Calla and Chi is that CSC is really unique in this market in that we have a blend of service and technology, and organizations are able to engage us for one or the other or both at sort of the level of need that they have around technology or the level of need they have around service. And so it's a very flexible offering, where it's not a one-size-fits-all approach. We absolutely can tailor again our offering to really assist our clients and really best meet their needs. But that is a bit of a backdrop.

Let's talk more specifically about CSC's annual report filing service. And really, if I had to sum it up in sort of a sentence, it's an outsourced service where it's a way of saying to CSC, "Get this obligation off my plate. I don't want to have to deal with the burden of remembering when everything is due, what's due where. I want to be able to really kind of focus on my core business or more strategic objectives for my legal department. And I will happily pay you a fee to get this off my plate." So that's fundamentally what we're referring to here is an outsourced filing service for annual reports specifically.

We do kind of break the service down into a couple of categories. So we have what we call pre-filing services. And so this is really critical. This gets back to, again, we had a large number of poll respondents say that they're not super confident that they kind of know where they are at this moment, right? Are we in good standing? Are we not in good standing? Are we up to speed or up to date in certain jurisdictions?

So this pre-filing service is going to do a comprehensive audit to create that absolutely crystal clear image of where you are in compliance and where you aren't. And certainly if there are situations where you are dormant or delinquent, we can perform remedial actions to certainly bring you back into compliance. And so we're going to give you that complete, clear image of your current status at the secretary of state.

Now the filing service itself, which is number two, is sort of the heart of the offering, and that's where we are going to prepare and file annual reports on your behalf. Now CSC's core business for many, many years is acting as a registered agent, and in that capacity there's quite a lot of information that we have that becomes relevant when we're filing annual reports — the names of these companies, where they're formed, where they're qualified, entity types, dates of registration, when was it formed, when was it qualified. And then that actually automates a calendar, that I'll show you a visual of in just a moment, that lets everyone understand, ourselves and our clients, when these filings are coming due.

Certainly there's information we need beyond some of those core entity vitals. So we need to know things like, in many cases, an EIN number, a business purpose, a principal place of business, who are the signers. And so there's multiple avenues, so to speak, to provide that information to CSC, and so you would work with a dedicated annual report specialist that would work directly with you to make sure that we are well in advance reaching out to gather any information that we don't currently have on file to make sure that we're preparing and filing your annual reports in a very proactive fashion. There's no 11th hour scramble drill. It's always done well in advance to make sure that it's a smooth and seamless operation, so to speak.

Now the post-filing services I think are just as compelling as one and two that we described above. And so when we handle the filings on your behalf, you have access to a technology platform that we call CSCNavigator. When we get evidence back from the secretary of state or equivalent office that is effectively confirming the acceptance and receipt of the annual report, we can notify you via email that we have that evidence, but we'll automatically tie that documentation directly to your entities in our technology platform so you've got that memorialization, so to speak, of the acceptance and the evidence, if you will, of the annual report that we've completed on your behalf.

Also, and you'll see this in a moment in a screenshot on the next slide, our Good Standing Calendar not only gives you visibility to what's coming due when and where, which is helpful just to be aware of, but it's also going to show you the real-time status of the CSC annual report team. So you'll know if something is in process or if it's been rescheduled or it's completed. So again transparency kind of is the key word. We talked about that as a best practice, where you can understand not just what's due, but where we are in the process of completing those events on your behalf.

And then also, within our technology platform CSCNavigator, we have a feature that we call Corporate Tracker that on an ongoing basis is doing checks at the secretary of state level to let you know what is your current status at the secretary of state. So yes, the annual report was filed let's say four or five months ago when it's due. But here we are several months later, and is everything still in compliance? So we're doing these regular checks, showing you that status in our technology. And then we're able to even provide email notifications if something actually changes. So if something lapses for some reason, you're going to have visibility to that. It's sort of a belt-and-suspenders approach, if you will, where not only we've taken care of what's coming due, but we're not saying take our word for it. We're giving you real-time visibility into your current status on an ongoing basis at the secretary of state level.

So on the next slide, which I've teased a little bit, this is a bit of a screenshot of what we call the Good Standing Calendar, or sometimes call our Compliance Calendar. And it's based on a couple of really powerful things, right? So one is what we call a Knowledge Base, and this gets back to that question of what's due where and when. It's really complicated. So we have all of that information built into a Knowledge Base. And then we also have what we describe as a rules engine, which is going to take a look at your actual companies, your actual set of registrations and all the relevant details, when did they get into the state, what's the fiscal year end, what's the entity type, and it's going to effectively apply all the knowledge and the technology to your unique set of companies and then create what is a very tailored calendar that focuses on your companies, where they're doing business, and when they have annual filing obligations that are coming due.

Apologies if the screenshot is a little bit small, but there's a column called Filing Responsibility. If it says CSC Managed, that means that is an event that we are taking ownership of on your behalf. And then, while not depicted, apologies for this, on this slide there's also a status column, I alluded to this earlier, where you'll be able to see where we are in the process of completing that annual report on your behalf.

Not only can you log in at any moment, there's complimentary access to this technology platform, but you can also, if you're interested, receive proactive alerts one, two, or three months in advance to know what's coming due and where we are in the process of handling those obligations on your behalf as well.

So the annual report service is very much a blend of service and technology. Again, it's an outsourced service, where we're handling the preparation and filing of the annual reports, but then also, from a technology perspective, you've got this beautiful lens into what's coming due and where CSC is in the process of completing it. And again, upon completion, we're sending you that evidence and linking those documents directly to those companies within your CSCNavigator account.

So with that, I'm going to turn things over to my colleagues to talk about our business license service offering, which again there's a lot of options here.

Calla: Yes. Thanks, David. We do definitely offer a wide array of services and also technology paired with services that are designed to help create efficiencies during any stage of that life cycle that David mentioned for us earlier.

So the first item that you see here, we definitely have the ability to become a research partner for organizations when they are expanding operations. So that first bullet there, we call it new location research. This service really just allows you to be able to reach out to CSC with that location information, it could be an address, it could be a city, it could be a county, it could be a state, and the different business activities and details that you'll be completing within that location. And we're able to then go uncover at each jurisdictional level that pertains to your location and identify what licenses may apply to you as you start to do business in those new areas. Again, it's very much so designed for places where you've never operated before and you're just moving into, so you can get a very clear understanding from the beginning as to what would be necessary for you to file on a license level as you start that new endeavor.

On the opposite side of that, if you look below, there is existing location research. We also support research options for businesses that are currently in operation, and this research is more or less an audit of where organizations are currently working. It follows the same principles of new location research, where we can uncover what is a requirement. But once we've uncovered what licenses are mandated because of your jurisdictions or your business activities, we're able to then work with those jurisdictions and confirm if those licenses exist today. If they do, we try to uncover things like what the license numbers, are they active, are they inactive, how to bring them back into good standing if they're still on that requirement list. It also goes a little bit further and confirms if there is not a license where there may be a requirement.

And then oddly enough, if you're over-licensed. Sometimes we work with clients that are holding licenses that they actually don't need to have, and that could be for any reason. Maybe sometimes you looked at a city and they said you needed a license, but you missed a critical detail about a city limit and you actually don't need that license. So there could be many reasons why you might not need to hold a license. So we can help you understand that.

Again, these research services are designed to help you when you're growing and also help just identify things that are happening today. We talked a lot about turnover, changes, transparency. If you're operating today and you have no idea what is going on, you can then lean on CSC for that audit, and we can help you understand what is currently out there and what needs to happen moving forward.

All right. So on the opposite side of that, if we move over here, we do also have a full management service that we call our outsourcing of your licenses. It really is a partnership, where we will take your license data, or again through that existing location research find it for you if you need us to, and we will create a portfolio view within our CSCNavigator technology platform. This really gives you easy access to your license data anytime anywhere, and it's also a way for you to be able to provide CSC with license details more securely and for us to communicate with you just about, again, what's going on. We provide dedicated support, an individual, an account manager that will help manage your portfolio of licenses.

And really what this service offers is just CSC monitoring expiration dates. We're proactively starting to work on renewing those licenses about 60 days in advance of an expiration. We are gathering and also preparing the applications for you so you don't have to continuously send details to CSC that we might already have. We're also going to be sending you alerts if there's other details that we need, like supporting documents or confirming changes to information, anything like that that needs to be updated for a license or changed year to year, filing to filing.

And then we're also going to send payments on your behalf and ultimately submit the licenses to those jurisdictions so you don't have to worry about all of those different administrative tasks that come along with managing the portfolio. You're really involved in the process when we need something from you or we need to verify something along the way.

So I think David said this about the annual reports. It's really important to mention that we're tying a service with technology. So we provide the technology, which is our Business License Portfolio Management system. This is a SOC-2 secure environment. And we're offering unlimited user capabilities. That means you can have as many users in the system as you'd like and as many permissions as you'd like. Some of our users may have access to everything. They may have read and edit rights. And others may just have certain capabilities to view designated jobsites or designated regions or personal licenses versus entity.

So this system allows for, again, CSC to provide our clients with real-time status updates so you know when a license is in process, when we've requested information from you, or if that license has been submitted, fees we've paid, and everything like that. We also treat the portfolio as a repository, so we're going to store active and historical license details, including the images and applications that are submitted. And because it's a SaaS application, it is accessible anywhere anytime as long as you have a secure internet connection, which it just gives you the ability to have your licenses at your fingertips anytime that you need it.

So we mentioned our technology. Again it's paired with the outsourcing solution, and we're just going to give you a quick glimpse into what it looks like. So on your screen you should see the Licenses & Renewals grid, which is going to give you an understanding of what you may see within your own license portfolio if you were to partner with CSC for our outsourcing solutions. We track items like the license owners to help you, again, distinguish between multiple entities holding licenses or individuals versus entities, the different license types if you have specialty licenses versus general licenses, license numbers, expiration dates, and just that key data about your licenses or the filings that we're completing for you.

So most importantly, you'll find real-time order statuses over there on the right. Again, it's a little small, so bear with us here. But the real-time statuses are just giving you an understanding of what CSC is doing to fulfill the steps in the filing process and again giving you access to see that whenever you're logged in.

You'll also note that there's an image on the very far left of the grid, which is going to be digital copies of the licenses that are attached to those line items. They are available for printing or downloading, saving, producing whenever you need them, and again just integrated into your grid view there, making you have more accessibility to data.

Within this grid, you can also filter. You can sort to report upon different metrics or license attributes. You can also change the way you view your data, moving things around, or export it all together. So there's easy ways to do that, just making it easy to share specifics either internally or sending them out if you need to provide them to anyone else.

If you check out the bottom right snapshot, you'll actually just be looking at the Order Status History that we're also tracking. We're not only going to just give you real-time order statuses, which was on the original grid there. We're going to provide additional descriptions, giving you more detail about why this is in that status, so did we submit to an authority, are we preparing an application, did we ask you for something, without really needing to inquire with us what that status means.

And again, this is a very quick overview of what our License Portfolio system looks like and what it could offer you for management. But our technology doesn't really stop there, and we have another option for you. So Chi, if you wouldn't mind to help our guests understand just what License Pro is in the world of licensing.

Chi: Yeah, of course. So we have another platform also available to you guys as well. It's License Pro, which is going to be a software for those of you that like to keep it all in-house and need a self-managed software. License Pro is a tool that is really designed to help you effectively manage your overall license compliance across the organization and bring together data and different workflows that are going to be needed to support the licenses and permits that you currently have within your entities, your locations or stores, your operations, or even your different professionals, like your contractors, engineers, architects, insurance producers. It's going to help address those challenges that we discussed earlier by just going above and beyond just the renewal management scope of work but overall the whole compliance space.

License Pro, I think it's a very robust software in itself because there's so many different key things you can do in the software. I always talk about on demonstrations, when I'm going over the software, how every user of the system can really make it their own and have a lot of benefits out of it. One of those key benefits, of course, is going to be that visibility and transparency to the data of the software. Every organization is going to be able to have as many users as they want to in the software and bring them all in. And everyone will be able to see what's currently going on in the compliance space, everything that's related to the entity, everything that's related to the locations, the licenses themselves, the individuals.

And also having the software act as a document storage, we're able to keep all your documents in one place related to each workflow period or renewal period. As well as group communication and collaboration. All your users are going to be able to communicate and collaborate in the software as well. And then using our reporting tool, we're going to offer you a lot of automation in the software as well.

Other key benefits in there, you're going to be able to customize different workflows to streamline your renewals. You're going to have some compliance processes that are going to be specific to your industry. With License Pro, we have users in almost every industry out there currently using License Pro. I think a lot of times people want to think about, when they're looking at License Pro and looking at a software, "Oh, well, how is it going be pertinent to me specifically in my business scope?" And License Pro is really going to be what you make it out to be. I think one of the biggest benefits of License Pro is having it be a one-stop shop for you and having it being able to tailor to your business needs the way you want to.

There's going to be a lot of different integrations in there, a lot of it between your accounts payable and other source systems as well, especially if you're using other CRM management tools as well. So you can integrate License Pro with those tools.

And my personal favorite part of the software is going to be having different dashboards and reports set up for that visibility so that way you can see what's coming up with your licenses, what's coming due in your pipeline, what work do you need to start working on. That way you're really able to really take a hands-on approach in your compliance management process and tackling your license renewals. And, of course, having easy access to your license data and documents.

If I come over into a quick little screenshot of License Pro, this little screenshot here is the homepage of what License Pro looks like. When you're coming into the software, this homepage is really going to serve as your calendar reminder of what's coming due. You're going to be able to, once you bring your data in the software, have those expiration dates attached to those licenses. And then the software, every time you log in, it's going to pull those licenses as they come up for renewal, trickle down to your pipeline, it's going to organize them onto your homepage through this little time frame up top here. So I have my past due licenses. I have my licenses coming due in 0 to 14 days. I have my licenses coming due in 45 to 120 days. Now this way I can take a more hands-on approach and see my licenses that are coming up for renewal.

One question that I get quite often, when talking about License Pro, is, "Oh, but setting this up is going to seem like a lot of work." I don't want you to think that's the case. Bringing data in the software is very easy. And I just want to tackle this real quick because I know we're coming up on time. You're able to bring data in, in so many different easy mechanisms and keep track of that data. You're going to work with a project manager to help work with you and building up the software to your needs. So you're always going to be with somebody for success.