She has led project management and helped implement streamlining programmes for numerous public and private companies in the UK and overseas and has particular experience with Japanese, European and US-controlled groups. By offering complex and flexible approaches, Samantha helps clients unlock value by streamlining business structures and eliminating non-core or underperforming businesses. But the upcoming G20 and OECD rules are just one reason why multinationals are moving forward with business simplification. Overall, and well before this year`s meetings, the financial and legal stakes to meet the legal requirements have increased. Why is it time to look for simplicity in entity management? For starters, international tax reporting is becoming much more complicated due to a seismic shift in G20 countries and the Organisation for Economic Co-operation and Development. In July 2021, the G20 announced a plan to level the playing field between tax havens and countries with higher corporate tax rates, adapting to the rise of multinational digital giants such as Apple, Google and Facebook. According to the New York Times, these reforms “open the prospect of the biggest overhaul of the global tax system in a century.” In addition, our panelists will discuss ways to monetize tax attributes and tax considerations related to entity streamlining and supply chain changes. By applying her legal education and tax knowledge to general business functional issues, she takes a cross-functional approach to helping clients achieve significant cost reductions by reducing their legal footprint. Organization leaders can`t plan or manage what they can`t see.
And legal, compliance, and finance teams can`t act decisively, effectively, and confidently when burdened with exponentially increasing administrative tasks. Denise: In short, I would define the LER as the process of optimizing a legal business structure to properly fit an organization`s strategy and vision for the future. In practice, this means examining a company`s organizational structure, discussing with key stakeholders the elements of its functions and business units versus the organizational structure, and proposing a solution to reconfigure the legal entities that make up the structure. LER can unlock value through an optimized legal structure that meets the current and future needs of the business. increases oversight and transparency; Improves tax efficiency and meets all legal and regulatory requirements. The potential savings are often more substantial than many companies can imagine, including reducing audit fees, management reporting costs, and tax and compliance costs. In the area of day-to-day operations, tax departments cannot easily access tax identification and jurisdiction information for activities such as tax authorizations or easily adapt to new regulations. Secretaries-General are falling behind in terms of the latest disclosure requirements and responses to stakeholder requests. Paralegals and legal teams also strive to provide accurate and up-to-date data and answers to business-related questions. Finally, treasury teams lack the data and visibility they need to facilitate M&A due diligence and decision-making. Cost savings are another compelling argument for streamlining legal entities (LIRs): “I`ve seen this when some companies have minimal working capital needs and by consolidating them, these companies have been able to free up that cash for other purposes within the organization,” said Chris Nelson, Director of International Tax and Transaction Services at EY. In addition, he added, “streamlining makes organizations agile for corporate mergers/separations and often pays off by incorporating tax planning opportunities.” In the day-to-day operations of accounting, legal and compliance teams, cost savings naturally come from increased simplicity – the ability to do more with less and faster.
“LER also creates efficient business organizations by streamlining processes and localizing inherent operational synergies,” said Denise Guarino, Head of Legal Entity Streamlining and Head of International Tax at Ernst & Young LLP. With its LER projects, Platis – Anastassiadis & Associates Law Partnership has a multidisciplinary team to help you provide an effective process to identify and resolve key considerations. We use specialized resources in the commercial, legal, financial, tax, HR, treasury and IT fields. Chris: I would add that lower costs could include inefficiencies and risks arising from an unrefined and outdated entity structure, intellectual property and the use of computer systems. By refining and updating legal entity structures, CEL inherently eliminates these costs. Midaxo`s Legal Entity Streamlining Solution is a combination of a complete playbook for legal entity streamlining (optimized for the Midaxo platform), over 20+ document templates from the award-winning Midaxo cloud platform. “Streamlining legal entities can significantly reduce audit, tax and compliance costs, realizing shareholder value and helping clients achieve their goal of a simple and transparent group structure. This contributes to building a better world of work by improving corporate governance, strengthening investor confidence and enabling better risk management. Denise: A common misconception is that LER is only focused on eliminating dormant legal entities, which is not the case.
While it is true that an in-depth study of a structure usually identifies quick gains related to the elimination of dormant entities, such as: By implementing an enterprise resource planning (ERP) system, LER focuses more on holistically streamlining an organizational structure and often identifies legal entities that do not serve a purpose in their own right, whose rationalization provides operational synergies. Chris: Whenever a sales organization owns a large number of legal entities, LER should definitely be used to reduce the myriad costs associated with that structure. In addition, a large legal structure can hinder growth or exacerbate the financial challenges that many companies face. For this reason, LER is used as a tool to support the simplification or transformation of the company. For example, as market conditions put increasing pressure on supply chains, the RER is a necessary solution to identify legal entities that cause delays and frictions in the efficient flow of goods and services. Midaxo`s Legal Entity Streamlining Solution enables executives to effectively manage legal entity changes while reducing costs, minimizing risk, and streamlining legal entity governance. Torsdon: LER continues to be an important tool for companies to maintain their margin and headcount as revenues across various industries are impacted by COVID-19. It is one of the tools that executives prefer to manage costs without compromising the quality of critical products, services or business investments.
Running LER is also compatible with the new remote work culture resulting from COVID-19, as most of the necessary information is retrieved in a virtual environment. For example, the RER can be done with a mix of short interviews (which can be virtual) and questionnaires to gather relevant information. We also review publicly available business register data and readily available tax, legal and financial data to support our analysis. As a member of the tax departments of the American Bar Association, the Massachusetts Bar Association, and the New Hampshire Bar Association, his knowledge includes business transformation, international taxes, transfer pricing, and streamlining legal entities. Torsdon: There are a number of hard and soft costs that can arise from LER. Examples of quantifiable costs include legal, tax, financial and regulatory filing requirements, elimination of duplicate functions, maintaining minimum working capital requirements, fees – such as bank account fees, software license fees, data warehousing fees, insurance premiums, general counsel fees and translation fees, etc. – and the resources needed to meet all these obligations. LER can lead multinational companies to potentially costly risks and red flags – for example, are complexities in a company`s corporate structure: This webcast, the seventh in a row, will cover topics such as cost reduction, streamlining legal entities, the use of attributes, and tax supply chain considerations in the context of disruptions caused by COVID-19. Our panelists will discuss tax considerations and attribute planning related to simplifying legal and operational structures to improve liquidity. We have experience in supporting all organizations, whether they are large multinationals looking to reduce their global footprint or a small national organization looking to remove a single entity from its structure for a specific purpose. Our business simplification team integrates restructuring, tax and financial advisory knowledge to help your business assess, streamline and simplify its legal entity structure at key stages of business simplification: M&A tax advisors, consolidated tax filings, internal restructurings, legal entity rationalizations and general corporate taxation. Common events that trigger the need to streamline legal entities: “In my work with large multinationals, I focus on providing a fresh perspective to realign their entities to achieve business goals.