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In today’s globalized business environment, many organizations operate across borders, outsource parts of their operations, or expand into international markets. With this growth comes the challenge of staying compliant in multiple jurisdictions. For General Counsels (GCs), managing legal and regulatory compliance across various countries is more complex than ever.
The rising regulatory pressures, varying legal requirements, and increasing risk of penalties make it essential for legal teams to adopt advanced tools like AI-powered compliance software. In this guide, we will explore the key challenges of multi-jurisdictional compliance and how AI and entity management platforms can help General Counsels reduce risk and ensure compliance across borders.
The global regulatory landscape presents significant challenges for businesses expanding across borders, including:
As businesses expand their organizational structure across borders, their compliance teams need to stay ahead of the regulatory trajectory and practice proactive approaches for reporting, filings, and disclosures to avoid penalties for non-compliance.
At the same time, the complex regulatory landscape and steep penalties add friction to entity creation, transactions, and deal-making, placing even more pressure on the legal teams that are struggling to address multiple issues with limited resources.
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In most cases, national regulations oblige global companies offering products or services on local markets to comply, irrespective of where the business is registered.
For example, the European General Data Protection Regulation (GDPR) applies to both EU-based and non-EU-based companies that process EU citizens' data. Meanwhile, the penalties for non-compliance with the GDPR range from 10 to 20 million euros or 2-4% of global annual turnover, depending on what is higher.
Other regulations like the U.S. Corporate Transparency Act apply to local and foreign businesses registered within the local jurisdiction by filing a document with a secretary of state.
Non-compliance with the CTA is fraught with civil penalties of 591 dollars per each day of violation and individual criminal penalty for company officers, which includes up to two years in jail and/or a fine of up to 10,000 dollars.
Meanwhile, companies involved in transfer pricing disputes may face multi-million-dollar claims for unpaid taxes and fines from tax authorities resulting from unclear intercompany agreements or ineffective entity management practices.
Such harsh penalties present serious risks and put heavy pressure on the General Counsels and compliance teams tasked with implementing legal risk management strategies.
Confronted by multi-jurisdictional compliance challenges and severe penalties, General Counsels and legal teams look to effective legal risk management strategies and regulatory compliance software to implement them.
Among the extensive range of tools currently available, entity management platforms offer critical support to legal teams aiming to reduce risk and stay compliant across multiple jurisdictions.
Businesses implementing entity management software can use their corporate records as a strategic asset by providing the board and key decision-makers with accurate data for strategic planning.
By leveraging a cloud-based single source of truth (SSoT) for corporate records, the legal teams can streamline their filings across jurisdictions, accessing data from anywhere on any device.
When legal teams are doing their compliance work in entity management software, they are able to automate multiple manual processes, cut human error and improve the quality of compliance work by maintaining all corporate records accurate and up-to-date.
Assisted by automated processes and reminders, the compliance team can ensure timely filings and disclosures without missing important deadlines and subjecting their legal entities to the risk of penalties.
Artificial Intelligence is changing the game in many industries and spheres, including compliance work. Empowered by regulatory compliance software implementing AI, the legal teams further their capabilities, streamlining the compliance work.
When legal teams work in AI-powered cross-border legal compliance solutions, they can leverage AI for multiple tasks, such as:
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Athennian helps companies reduce risk and stay compliant across multiple jurisdictions by offering a powerful toolset for global entity management for General Counsels that automates filing, compliance and entity maintenance.
Offering the benefit of a single source of truth for Governance, Risk and Compliance, Athennian assists in navigating complex multi-jurisdictional compliance challenges with confidence, enabled by accurate, comprehensive and always up-to-date data.
Meanwhile, Athennian's AI capabilities, such as Centralize and Initialize tools, help teams to take even greater advantage of entity management software by automating entity creation processes, cutting entity creation time to less than 10 minutes and handling multiple documents simultaneously.
For more information on how Athennian can help reduce risk and stay compliant across multiple jurisdictions, please don't hesitate to contact our team to request a free demo.
"Very easy to use, modern interface, excellent support. Athennian has an amazing conversion team. They helped us migrate all of our data and the training was very good."
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“When we were reviewing other entity management systems on the market, in some cases, we were not comparing apples to apples. But with Athennian, there was really no comparison. The paralegals were so excited to come on board.”
"There are so many things I like about this program, but the one thing that really stands out is the user friendly interface. The program is fast and allows me to enter corporate information very quickly and efficiently. I would also like to note that Athennian provides the most the fantastic customer service."
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