Why Organizations Consolidate Registered Agent and Entity Management With CSC

Annie: Hello, everyone, and welcome to today's webinar, "Advantages of Combining Your Registered Agent and Entity Management." My name is Annie Triboletti, and I will be your moderator.

Joining us today are Andrea Jonaitis and David Jeffries. Andrea is a product manager in the Corporate and Legal Solutions Group at CSC. Since joining CSC in 2017, Andrea has specialized in global subsidiary management and entity management, working with prospects to create and to present an accurate and clear scope of services, including helping subsidiaries stay in compliance as well as demonstrating CSC Entity Management. David is a senior director of product management for Global Compliance and Governance Services at CSC in the Wilmington, Delaware headquarters office. David is responsible for driving the strategic direction of CSC's compliance solutions. With CSC for over 15 years, he has significant experience providing training, implementation, and consultative services to clients of CSC Entity Management.

And with that, let's welcome David and Andrea.

Andrea: Good morning, everyone. We're so happy to be here with you today.

David: Yeah, thanks, Annie, for the intro and again thanks for all for joining. We're really excited to take folks through our webinar today. There's quite a bit of content to go through. We've got a full hour, but I feel like we're going to need the whole thing. So really, without further ado, let's take a look at today's agenda.

As Annie noted, there's a Q&A widget. So we encourage folks to just ask questions as they come to mind, and we'll try to have time at the end to address those. And we can try to be nimble and address some questions throughout as well.

So we do want to start by talking a bit about CSC as an organization. We appreciate that there are a number of organizations joining us today that do not currently work with CSC in any capacity. So we want to talk a bit about ourselves as a company. We want to talk about sort of the current climate that corporate legal departments are working in, talk about the registered agent role, and I think you'll see as we go through the presentation that that role has evolved quite a bit over the years. And then we'll really get into some of the reasons why organizations elect to partner with CSC as a registered agent.

We'll give you a quick little demo of what we call our Navigator platform. That's the technology that comes automatically when CSC is engaged to act as your registered agent. Then we'll start looking at, again, sort of the focal point of the webinar, the benefits of actually combining your legal entity management software with your registered agent provider. And then my colleague Andrea will get into a bit of an abbreviated demo of our Entity Management software to take you through some of the premier features that come with that particular application. And again, a Q&A at the end and hopefully some Q&A along the way as well.

So I really have the pleasure of talking a bit about CSC as an organization. And so the slide that folks should be seeing now has a number of statistics. But I want to kind of talk a little bit about some other things beyond what you're kind of seeing on the slide itself.

So as an organization, CSC has over 3,000 employees in 14 countries across 46 different locations. Our global headquarters is in Wilmington, Delaware. We're a privately held organization, and we're able to trace our roots all the way back to 1899.

We're the largest U.S.-owned registered agent, and we're also very proud to say that we're the largest registered agent by market share as well. You'll see that one of the stats on the screen talks about the fact that over 90% of the Fortune 500 utilize CSC for at least one of our services, which again proud of that certainly and also very proud to say that over 20% of the Fortune 500 utilize CSC for our Entity Management software, which we'll dive into again a little bit later on in the presentation.

In terms of our mission in the corporate legal services part of CSC, it's to really become an indispensable compliance partner for the customers that we serve by offering solutions that integrate world-class service. We'll talk about our obsession with service in a little bit, compelling technology as well as actionable data, and I think you'll start to see that come to the fore as we go through the content and get into some of the demonstrations.

So with that said, we do want to talk a little bit about what we're calling the compliance management climate that our corporate legal departments are facing, which are typically the key stakeholders that we work with through the services like registered agent and entity management that we'll talk about today. And so really just kind of a couple things to highlight here.

So one of the trends that we've seen for several years now is that corporate legal departments are being asked to do more and more with fewer resources, and it doesn't seem like that framework is going to change anytime soon. Also what we're seeing is that corporate legal departments are transforming, and some are in various stages of the transformation. Really there's sort of this new discipline and function of legal operations, where the corporate legal department is striving to become more of a kind of the strategic advisor to the business that they serve.

And then really the other thing that I would mention on sort of the market climate is on kind of the far right there about business picking back up. So mergers and acquisitions, it's often a really strong barometer of sort of the general activity around changes that are happening. And entity formations and dissolutions, etc., you know, it was going sort of gangbusters before the pandemic, and then things slowed down a little bit. But really we're starting to see things pick back up. And I think a common theme that we're hearing from organizations is that they have a goal to be deal ready, whether that's acquiring, selling off parts of the business, and so having your entity compliance and governance program in a more mature state is really critical to achieve the goal of being ready for those types of deals as they start to materialize.

And then also in terms of there's a study that we're sharing here through the Association of Corporate Counsel, the ACC organization, that looked at kind of a number of challenges that are facing corporate legal departments. So this survey specifically included over 500 organizations across 20 industries in 48 different countries. So it's a very sort of broad reaching survey and again looking at some of the common challenges that corporate legal departments are articulating. And some of the common themes include the fact that there are often kind of a lack of bandwidth to deal with all the different priorities, which are sometimes competing with one another. And then a lot of the processes are kind of inconsistent and a bit antiquated.

And so, for me, that really starts to speak to the value of being able to partner with a service provider that can serve as an extension of your corporate legal department, offering efficiencies through outsourced services and offering technology that allows you to really make smart database decisions with a clear picture of your overall compliance. And so, again, that's some of the benefits that we feel that CSC can bring to the table for these organizations. So again a little bit about sort of the current climate that I think a lot of the corporate legal departments are working in.

So really, at this point, I'm excited to get to turn things over to my colleague Andrea, who's going to take us through kind of the traditional role of the registered agent. So Andrea, I'll turn things over to you.

Andrea: Thanks, David. And probably many of you on the line with us today already know what the role of a registered agent is, but we just want to clarify that just to make sure that we're all on the same page about the purpose of your registered agent and some of the services that a registered agent can provide for you.

Commonly a registered agent is some kind of individual or third party that's responsible for accepting your legal documents on behalf of your organization. So those could be state and court documents. Arguably one of the most critical roles of a registered agent is to provide insight to help your company stay in good standing with your entities by helping you to comply with deadlines for annual reports, tax returns that need to be completed. A registered agent can store and send legal documents to you, providing you with a repository and a way of accessing those legal notices, staying organized with them, and being able to provide expertise around the compliance standards for all of the states or jurisdictions where you are formed or doing business.

As it relates to service of process, first the strict definition of service of process really is a notice to a party of the commencement of legal action. And what that boils down to really is just a simple document that relates to litigation. But in practice that also can include things like garnishments, subpoenas, bankruptcies, foreclosure filings. There's a lot of documents that will come into your organization that have to be handled appropriately and expeditiously.

The role of your registered agent, as it relates to that service of process, is to receive those documents on behalf of your organization and on behalf of your entity in those jurisdictions where you're qualified to do business. Being a registered agent is a significant responsibility, and there's a lot of rules that govern registered agents and these rules vary from state to state. So, for example, there are residency rules in certain areas. There can be requirements about the days or even the working hours that a registered agent must be available to receive your legal documents. So it's often preferred to outsource the function of the registered agent to a professional organization, like CSC, so that you can avoid consequences like default judgments or other fees and penalties that might result from the improper handling of your legal documents.

The registered agent role, as it relates to entity management, most importantly your registered agent is going to help create visibility around your annual compliance due dates that can impact the good standing status of each of your entities. Good standing means that an entity is acting in accordance with the explicit compliance obligations, again such as your annual reports and your tax filings.

Your registered agent really is crucial. They must be able to process your litigation quickly, to be able to provide you with the best tools and insight and information to help you adequately respond to and manage those legal notices that come in and the varying entity compliance standards so that you can manage your business and remain in good standing as effectively as possible.

David: Let's talk about some of the primary reasons, I think there are a host of reasons, but what are some of the primary reasons that organizations change their registered agent to CSC. So we tried to boil it down to kind of four of kind of the key reasons.

And so number one, and we'll kind of get into some details around all these, is service. We'll talk about security and availability, which is absolutely critical. We'll talk about how simple CSC actually makes it for clients to make the transition to our services. It really becomes a light lift for organizations that make that change. And then we'll also talk about the technology aspect, which is where I get really excited, and that's where we'll have some technology demos a little bit later on in the webinar.

So let's talk a little bit about service, and I think I used the phrase earlier in our webinar that CSC has an obsession with service. And I think that's really fair to say. It's really central to kind of who we are and really our values as an organization.

And so the second bullet point there talks about best-in-class Net Promoter Scores. And I've been at CSC for 15 years, but to be candid, when I first came to CSC and I heard people talking about NPS, I said, "What are you talking about?" It wasn't something that I was familiar with. And so maybe there are folks on the line that are also maybe not aware of what that is.

And so Net Promoter Score is a third-party organization that many organizations, like CSC and others, engage with to effectively understand how satisfied our customers are with our services. And really what Net Promoter Score does is it asks a very simple question, which is: On a scale of 1 to 10, how likely is it that you would recommend this company, in this case CSC, to a friend or to a colleague?

And so if a respondent says that, "Oh, I'd put it on a 9 or a 10," they're considered a promoter, someone that's very enthusiastic. Folks that respond about a 7 or an 8, they're considered passives. They're not necessarily thrilled, but they're not upset. And then anyone that's 6 or below is considered a detractor. And then there's a whole sort of weighted score metric of figuring out what is your kind of overall score.

And really we're incredibly proud to say that we have what is considered world-class service and really in line with companies like Disney and Apple and Chick-fil-A, that people sort of love and rave about. And so it's really meaningful to us that we fall into that sort of class of a provider.

And when we get those scores, which we do this on an annual basis, we slice and dice the information. We share that with our senior leadership team. And if we start to see trends where things are declining, action plans are put in place and we make sure that we're doing everything possible to service our customers in the absolute best way possible. So I did want to talk a little bit about kind of that key element of how we're kind of being evaluated on an annual basis to make sure that we are delivering that top-notch service.

Andrea was talking a bit about kind of the traditional role of the registered agent, right, and there's sort of two sides of that coin, handling service of process, which is really critical. Obviously, there is kind of the entity compliance component, which is really the focus of our webinar today. But we're talking about the fact that the role of the registered agent really has expanded quite a bit.

And so where I think CSC adds a tremendous amount of value to organizations is the fact that we have holistic services for what we're calling the life cycle of the entity. So as you're doing formations, withdrawals, qualifications, name changes, amendments, mergers, acquisitions, etc., we have a team of experts where I want to say that the average tenure of a customer service representative in our part of the business is over 10 years, where people are engaging CSC to really help with all the filings that are involved in kind of maintaining and going through the life cycle of their entity management. So again, we bring a lot of expertise to the customers that we serve in that regard.

The next area that we'll talk about, and this is where I'm going to bring Andrea back into the conversation, which is absolutely critical, which is security and availability. So Andrea, I'll turn this back over to you.

Andrea: Absolutely. When it comes to security and availability, CSC is dedicated to the highest levels of protection. We work regularly with customers who have among the most stringent security requirements, such as banks and financial institutions. Our Entity Management software specifically is trusted by over 20% of the Fortune 500 and just over 17% of Fortune 1000 companies.

All of our CSC applications and data are maintained on CSC dedicated servers that are located in the United States. These are ISO 27001 certified. They are SOC 2 Type 2 certified annually. Our applications, our organization, and our employees are tested regularly on an annual basis.

We also have detailed business continuity and disaster recovery processes and plans. And while we've never had to implement these processes, having those detailed plans and processes in place is crucial. And everything has been carefully planned, evaluated, and reevaluated regularly to ensure again the highest standards built upon a foundation of transparency and communication. So we want to make sure that we always communicate with our customers and other stakeholders in the event of any issue.

In addition to the annual SOC certification, we conduct regular penetration tests, this is sometimes referred to as ethical hacking, so that we can again evaluate our security measures, firewalls, encryptions, and other protections.

All CSC applications include robust, flexible user access levels and role-based permissions. We include folder level securities. Entity Management even has dynamic entity preferences to allow you to control the entities someone can access.

With an entire team of security specialists that are dedicated only to security and availability for our software, we're prepared to speak with your team and share the details of these protections with you so that we can put your mind at ease.

Another place where we really want to put your mind at ease is the actual change of agent process. This slide here provides a visual representation of our change of agent process. And it might seem like I'm oversimplifying this process, but really CSC takes a lot of pride in taking a process that could be inherently complicated and making it really easy for our clients. We want it to be absolutely simple to take the risk and the unsure nature of this process and remove that. We have over 120 years experience in helping our clients to seamlessly switch their registered agent to CSC without missing anything or skipping a beat.

It really all starts with a dedicated service team for your account that serves as your one main point of contact for this transition. We are going to conduct a nationwide good standing audit to understand really where we're starting from. The audit is going to reveal your entity registrations, the statuses, the current registered agent on file with the secretary of state. And then with a limited power of attorney CSC is going to prepare and file all of the change of agent forms for each entity and each jurisdiction at no cost to you.

Most importantly, CSC works with your current provider to protect you against any adverse impact of changing your agent. No SOP will fall through the cracks. We ensure a seamless transition that's free of worry and most critically free of fees and penalties.

And we'll even break up with your current provider. You don't have to have that uncomfortable conversation with your provider. At the risk of sounding a bit callous, this is, of course, CSC's favorite part of the change of agent process.

All jokes aside though, we will ensure that the change of agent process is incredibly smooth, very trouble-free so that really you don't need to worry about that process at all. You can spend your time and attention running your business instead of worrying about the details of that transition. CSC has your back and is your trusted partner and provider in that process to make it easy.

As we transition your entities to CSC as the registered agent, our team is going to provide you with visibility and insight into your portfolio by way of our CSCNavigator technology, which David is going to describe and even show you a piece of the CSCNavigator platform.

David: Yeah, absolutely, and so this is where the technology piece really comes into play. So as organizations name CSC as their registered agent, there's information, once the states start to accept those filings, that flows automatically into what we call our CSCNavigator platform. And so clients are able to log in and automatically see what we're describing as core entity and jurisdictional vitals, so the names of those entities, where they're formed, the formation dates, the entity types, the different jurisdictions where those entities are qualified, the dates of registration, statuses at the jurisdiction level. That's all happening dynamically. There's nothing that a client has to enter into the platform to be able to see that information. It's built just by virtue of the process of naming CSC as your agent.

Also, as organizations engage CSC for filings, there's documents that come back as a consequence of those filings. We often call that the evidence. Whether that's having CSC form an entity or file an annual report, those documents are automatically linked to the corresponding entities in our platform, which we'll show you in just a moment. And that's true not just with the change of agent filings that we're doing at the outset of the relationship, but on an ongoing basis as well.

We have an automated good standing calendar that provides insight into when there are annual filing obligations, like annual reports that you might choose to handle yourselves internally, or again that's a service that you could have CSC take off your plate. And then also again having this visibility to the current status of your entities. And so this is all complementary technology that comes simply by naming CSC as your registered agent.

And so now we're going to talk about what are some of the advantages of consolidating your registered agent with your entity management software. And so I'll kind of touch on this, and then we'll get into some of the details of the Entity Management software in just a moment.

What I should say to maybe preface all of this, because we did take a look at our list of registrants and we saw folks kind of that are a part of smaller organizations so to speak, and then we saw some folks that are on the Fortune 500 space, and I think one of the really nice things about how we make our services available is that really you can sort of opt in for and subscribe to the technology that really kind of meets your needs.

We just saw kind of what we would call our standard Navigator platform, and for some organizations that is more than sufficient in terms of the needs that they have around tracking their compliance. That said, as folks start to have a higher volume of entities, then all of a sudden they need more horsepower. They want to be able to build org charts and track minute books and track directors and officers, which is what we're about to get into.

And so really what are the benefits of having a single provider for these capabilities? And I think it really comes back to the fact that when CSC is the registered agent, we're often engaged to handle the transactional filings, again formations, dissolutions, withdrawals, name changes, and as a consequence that information is flowing automatically into the platform. The documents that come back are automatically being linked to the entities.

And so when organizations do want to go beyond those sort of basics so to speak, they want to be able to do that on a vetted foundation of information that's being updated dynamically. And so instead of having what we would think of as kind of a standalone entity management application, where you as the user are sort of responsible for adding that new company, remembering to add that formation document, remembering to add that qualification, remembering to mark that jurisdiction has withdrawn, it's just sort of rife for error, it's rife for getting something wrong, or just falling behind, especially if you have a lot of fluidity in terms of changes that are happening in your entity life cycle. And so it's sort of very logical that organizations would look to kind of bring their entity management software and their registration provider together, because again you're able to kind of build on top of that critical, vetted foundation.

So with that, Andrea, I'm going to turn things over to you to talk in a bit more detail about kind of the capabilities and the features of our entity software. And then I know you'll actually get into a demonstration as well.

Andrea: Yeah. That sounds great, David. I'm really excited to share a little bit more about CSC's Entity Management system. There really are a lot of benefits to going beyond the standard CSCNavigator platform that David described.

So for customers who are looking for a more hands-on approach, maybe the ability to configure customized data in a more unique fashion, or if you would like to leverage some of the premium features of Entity Management, like the director and officer tracking and appointment tracking, being able to upload your own documents and files, managing minute books and documents beyond those that automate and flow into the system from CSC's work, being able to take control and upload those things yourselves.

We recently partnered with DocuSign e-signature. So if you're looking to route documents for electronic signature, where those are permissible, beyond wet signature, we can leverage the electronic signature workflow component of CSC Entity Management.

It provides the ability for you to manage stock and ownership, to be able to build dynamic org charts, both graphic and text-based org charts. It can allow you to track and manage your own DBA names if you manage those transactions on your own. Again, CSC will populate any of the data elements with any transaction we complete for you. But if your team customarily handles those types of transactions and projects in-house, you would be able to edit and manage the details in that premium system as well.

There's a Section 16 filer so you can complete your Forms 3, 4, and 5 inside of the system. There are compliance calendar alerts, such as those that David mentioned, and reporting, arguably one of the most critical functions, being able to really customize your data, track and manage or receive alerts and reminders for those items, and building those critical analytical reports and insights that you need to help you better run your business.

So without tooting our horn too much here, I just wanted to take a quick second to share some of our most recent awards for our CSC Entity Management platform. CSC Entity Management has been named the Best Entity Management System for the last 11 years in a row by the readers of the "New York Law Journal." We're so proud of the accolades and awards that we win. We were recognized as the most used corporate governance solution and entity management solution by the Corporate Legal Operations Consortium, the CLOC 2021 State of the Industry Report. Most recently, Entity Management was recognized as a 2022 Legal Technology Trailblazer by the "National Law Journal."

So we love collecting awards, and we feel like kind of what keeps us at the top of these awards is CSC's relentless dedication, that David described, to all aspects of our services and technologies, having a very transparent pricing model, including things that aren't ordinarily included, like users, training, support, regular enhancements. Regular enhancements certainly lead to CSC staying on top because we are constantly reevaluating the features and capabilities inside of the system. So we are regularly offering greater functionality to our clients to continue to add to the value of our services and technologies.