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How to uncover the hidden gems and dangers deep inside a business

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Priya-John

Priya-JohnProper legal entity detective work leaves no stone unturned and is helping financial organisations clean-up their dormant business structures. Priya John, a senior LEM practitioner with MorganFranklin Consulting in London, explains more about this crucial work.

Businesses tell governments they don’t like surprises. Yet it can be a revelation when major companies dig deeper into their own structure. It is not unusual to find long-forgotten dormant bank accounts from divisions that have been cut or closed, or portfolios of properties once run by managers long since retired.

These are the nice little surprises.

The other side of this is the lingering liabilities that have the potential to sting a business. And this is an increasing concern for companies across Europe, and for buccaneering private equity houses with stretched resources taking over large businesses.
The solution is a systematic investigation of a company’s legal entities across a number of jurisdictions. Legal entity management (LEM) involves a combination of detective work, tact and diplomacy working inside organisations, and the ability to ferret out financial information from some unlikely sources. It is regularly a dose of common sense. Such projects can also be office political and it can be difficult to get everyone on the same page: legal, financial, treasury and tax, so making the business case for LEM has to be done at the beginning.

Why do it? The reason companies merge or buy another is to release substantial cost savings and create efficiencies for future growth. However, there are legal entity risks which stem from such activity, including new regulations, audit findings and resource planning. There is, inevitably, a round of redundancies in the finance and support functions, yet this can happen at a time when the newly-enlarged organisation has doubled its legal entities.

Here there is something for private equity companies, who might do a lot of ‘data room’ due diligence when purchasing a business, but what is not known simply can’t appear in a seller’s documentation. LEM involves trawling through old ledgers, dusty files of legal documents and ensuring the pension positions are clear, and this can take time and patience.

So the first step in a proper Legal Entity Management process is rationalisation. This means looking at the entire entity, including the tax position, property portfolios, bank account holders, and pension liability, and reviewing the whole structure. Many organisations look to address the symptom of poor LEM rather than dealing with the underlying root cause.

Of course, every company is different in how its approaches its structure and business model. A good board makes the decision on how they want this structure constructed and run. Yet after years of acquisition and consolidation there is a clean-up job to be done, that can not only save millions, but mitigate future risk. Often senior managers, with heads down on daily matters, don’t even know what is in their structure, yet LEM can uncover assets – or more dangerously – major liabilities.

Companies often conduct partial legal or tax reviews of their operations believing this is enough, yet this fails to include every part of the company.

It is scary when you don’t know what you’ve got. It can be very messy too. Things do slip through the cracks all of the time. It is very important that diligence on the whole company is undertaken. However, this can be difficult for an in-house person because it is often a full-time job co-ordinating and capturing the findings.

Recent examples have been major banks with substantial commercial property accounts that were overlooked and forgotten, and a major international oil company with obscure bank accounts that no-one in the existing business knew about. These accounts can then be officially pulled into the treasury structure, swept upwards and used for proper investment purposes.

When key people move on, resign or retire, often with a clear-your-desk-and-be-out-by-lunch-time dismissal regime, knowledge can disappear overnight leaving no legacy and few traces. Most major organisations have a legal entity data system which was set up to capture all this kind of information, yet often no-one is clearly designated to keep it up-to-date, and vital data goes missing. Most times, the systems are completely inadequate and require regular review. Worse still, time is wasted re-inventing the wheel, when proper LEM will show up the gaps.

I have worked in several large organisations to rationalise legal entities, preparing an annual review process to ensure data repositories are up to date and maintained. It is a methodical and rewarding task because a proper repository becomes the vital place for accurate business data, and is used on a daily basis. It is important to take a holistic business-wide approach to data management. You need to communicate across the company that your data repository is being updated. Some key people might not even know an up-to-date repository exists and may use old data and inaccurate that they have at hand. That’s dangerous.

LEM is rewarding when you uncover assets, but liabilities are just as important. It is then about finding the right information before you close down the unwanted entities. Often companies liquidate dormant entities without doing any real due diligence. In some jurisdictions this might be fine, but in places, such as the UK, this can store up problems for the future. In the UK, there is a long period of up to 20 years to bring a dormant legal back to life to get the assets out. This process of retracing steps can be extremely time-consuming and therefore costly. Few people will remember anything about what the entity did many years ago and how or why it was dissolved.

When you are closing down or merging companies you want to make sure you are taking a proper note. If there are employees in company X, and you want to close it, then you have to make sure you capture this in the documentation.

Some companies have a distinguished history and heritage and no one in the existing organisation might realise that there were outstanding obligations or take the relevant steps to make sure that all outstanding items are cleanly closed out or transferred to an actively managed company.

A specialist LEM adviser will made recommendations for the organisation to consider and review. Typically, closure papers then go to the board for its sign-off, although there isn’t always a formal process to get started on the due diligence.

In the UK, cleaning up is a matter of working with liquidators so they can review the recommendation to close down an entity, although in the US the process doesn’t require a liquidator and an approved LEM specialist can handle the closures in tandem with the company secretary and the legal department. In the UK, there are other forms of closure that don’t require liquidator support, but the safest and most risk-averse way is to engage a liquidator. It is a matter of getting the companies as clean as possible before going to the liquidators because this is far cheaper for the client. A LEM adviser should create a standard check list based on all items that need to be reviewed, and then signed off by the legal, tax, treasury, finance teams and HR teams. The finance director gets the final sign off as in the UK liquidation process he or she will be signing a declaration of solvency.

It is specialised job, it requires knowing which stones to pick up and what to look for underneath. It is about having experienced people who stand between you and the liquidator to make sure that everything is being considered. And finding out these little surprises and dealing with them internally can often save a great deal of public grief in the future.

About MorganFranklin
MorganFranklin Consulting, with headquarters in Washington, DC, and the City of London, provides business operations, financial advisory, and IT consulting solutions to companies in a wide range of industries including telecommunications, energy, retail and technology. The firm supports clients in implementing their strategies and plans for growth, compliance, and business improvement. In 2012, MorganFranklin was named in Consulting magazine’s “Best Firms to Work For” list and the Inc.500|5000 list of the fastest-growing private companies in America. To learn more about the company and its capabilities, visit www.morganfranklin.co.uk.

 

 

Business

Staff training crucial for SME recovery post-COVID

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Staff training crucial for SME recovery post-COVID 1
  • 47% of UK’s top performing SMEs provide regular, formalised training for all staff
  • Despite this, 15% of small businesses report to never training staff
  • New findings come as part of an independent, holistic study into small business success, commissioned by Allica Bank to support British businesses

A new study, commissioned by business bank, Allica Bank, shows that the practice of regular training correlates strongly with high performance in SMEs and will be vital to businesses’ prospects of a swift recovery post-COVID. The study analysed data from over 1,000 companies and ranked their success on a scale that evaluated factors including productivity, growth, consistency and outlook.

Post-pandemic, many businesses will be focussing on day-to-day survival; it might be easy to forget long-term planning, of which staff training is a key component. Allica Bank’s findings indicate that small businesses should incorporate training programmes into their recovery strategy to ensure long-term viability. Training will improve morale, retention and boost the company’s credibility.

The study showed that routine staff training is a common characteristic among the most successful SMEs. 47% of the 100 highest scorers on the SME Performance Index provided training for employees at least on a quarterly basis. However, nearly half of all small businesses (46%) only provide training once a year or less, inadvertently hindering their growth and success prospects.

Frequency of training also differed across sectors. 34% of legal businesses provide training for staff once a month compared to just 6% in the hospitality and leisure sector. Whilst there will always be sector-specific disparities, firms in all industries can benefit from boosting and improving their training programmes.

Chris Weller, Chief Commercial Officer, Allica Bank, said:

With so many concerns and barriers for small businesses to navigate in the immediate term, it can be difficult for managers to focus on the training and development of their teams. However, if COVID has taught us anything, it is that adaptability and resilience are invaluable.

“The provision of regular training not only builds these characteristics into teams but serves to maintain a sense of value and togetherness that will boost morale, aide retention and improve performance – all of which contribute to the ongoing success of a business.”

“There is no one-size-fits-all approach to training, but it’s vital for business longevity that staff are supported with a formalised programme of some description. Customers will respond well to a company whose employees demonstrate enthusiasm and competence. Employees also need to feel that their skills are constantly being improved and expanding. These skills will contribute to the success of a company and this will feed through to the bottom line.”

Allica Bank’s SME Guide to Success identified six ‘rules to success’ that were more likely to be displayed by top-performing SMEs compared to their counterparts. The full report contains a wealth of additional data and insight into each of these topics.

As part of its mission to empower small businesses, Allica Bank is making the findings freely available and running a series of free online workshops with relevant partner organisations for businesses to attend.

Aliya Vigor-Robertson, CEO, JourneyHR, the expert partner for Allica Bank’s training workshop, adds:

Staff need direction and the knowledge that they are advancing in their career to stay motivated and engaged at work. An unmotivated, disengaged team is no recipe for long-term success and will ultimately hamper a business. Team members that lack tangible support from above are less likely to identify with their role and its duties, which is a completely natural reaction.

“Regular staff training is a key component of tangible support and will make the team feel secure in their career development. A happy team with purpose and direction will contribute to a thriving business”

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What Is Globalization

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What Is Globalization 2

What is globalization? Globalization, or inter-connectedness, is the ever-growing process of integration and interaction among countries, individuals, businesses, and even governments all over the world. Globalization has rapidly accelerated in recent years because of advances in communication and transportation technology. This allows us to be able to get from one country to another quickly and easily. This also allows us to communicate freely use the Internet to connect with our friends and families around the world.

So what is globalization and why is it important? Globalization will benefit many people around the world who are looking to travel more freely, save money on their monthly expenditure, be able to meet new friends and relatives from different parts of the world, learn more about a new culture, and take part in trade and commerce.

Globalization will benefit all of us because there will be more opportunities for everyone to participate in global markets. People in different countries have access to resources, information, and products they wouldn’t have otherwise been able to afford. There are also many opportunities for people to work at home.

Globalization is not just an economic boon, but it can also benefit all of us in other ways. As globalization continues, the boundaries between individuals, states, and countries will become less porous. There will be fewer political conflicts in the world, less violence, and a greater sense of cooperation, tolerance, and peace. These are all positive impacts of globalization.

However, globalization has also created some negative effects as well. It has caused people from one country to move to another to take advantage of globalization. This is also leading to some negative consequences such as a reduction of jobs in some countries. The effects of globalization also include increased competition and unemployment in many countries. Due to this decrease in jobs, wages are dropping.

The only way we can stop globalization is to make sure that we know what it is and what its benefits are. We must understand globalization and its impact on our lives and make sure we are ready to accept the changes that it may bring. if it is inevitable in the future.

The key is to be educated about globalization. There are plenty of books, websites, and television shows that explain how globalization is impacting us and the rest of the world. Globalization is not always bad, but we must be careful not to lose sight of its positives.

In the end, globalization is here to stay, so we must learn to live with it and embrace its benefits. We cannot fight it and try to fight it off, but we must learn to deal with it. And we can do that by educating ourselves. Globalization is here to stay for the long term but we must learn to adapt to it and learn how to live with it.

Globalization can be beneficial for all of us, but it has also caused many problems in the past. There were many cases of unfair trade practices and there was the rise of unfair labor practices. Some people argue that globalization has also reduced the pay of most Americans. So while globalization is definitely not all bad, we should understand that the benefits of globalization are not unlimited. and that we must be willing to give it some limitations and accept some sacrifices.

The biggest benefit of globalization is the ability for all of us to communicate with each other easily. The ability to connect with other people across borders makes it possible to share ideas, information, and knowledge. Since we can communicate with each other, the chances of getting a good price for our goods or services goes up dramatically. and it also allows us to save money by buying in bulk. This also translates to more savings on our end.

As mentioned earlier, globalization has brought about a change in the way people work and live because people are no longer tied down by jobs. They now have the freedom to travel and do what they enjoy.

As globalization continues, there will always be some people who are unhappy with globalization and are afraid to open their eyes to new opportunities that are available to them. But that is okay; this is part of the process of globalization.

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What Is Microsoft Teams

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What Is Microsoft Teams 3

Microsoft Teams is an application and web-based collaboration tool that combines chat, videos, online collaboration, document storage, and collaboration with other applications. The service integrates well with the Microsoft Office 365 business solution and features numerous extensions that can integrate well with other non-Microsoft products, like SharePoint. There are many different versions of Microsoft Teams but here are some of the basic functions that all versions offer.

Teams also offers a variety of options for people to create and customize their own groups. This feature provides a way for people to organize their teams within Microsoft Teams. For example, there may be teams for business projects and then another group for personal tasks or social tasks. There are also different types of teams which include teams for social, personal and business.

Microsoft Teams allows users to make lists of files and documents and view them from different perspectives such as in the document viewer or from another Microsoft Teams project. This feature is called “project pane”, and it shows a summary of each of the files in the project. There are also sections for all files in the project that you can see in the “Files” pane.

Microsoft Teams gives users the ability to share information and collaborate on these shared items. A user can create a document that has other people add comments or attach files and then save the document to a list so that other people can view the document in a Microsoft Teams document viewer.

Another feature of Teams is the ability for you to invite other team members to work with you. A user can join a team and then invite other team members to collaborate with the team members who join the team. You can also invite team members to join a new team. When a team member joins a new team, they will be automatically added to your existing teams and the teams will merge together.

Microsoft Teams provides a number of different ways for you to collaborate with others and see the files and documents of others. These include groups and threads in the main document viewer. You can search your files using the search box in the document viewer and you can share your documents with others by email.

Microsoft Teams provides users with a variety of different tools to help you organize and manage your teams. You can assign members to specific teams, assign permissions to members, create custom groups, organize tasks and events, and organize files and documents into groups.

Microsoft Teams can help you build a team and create a collaboration culture that you want to create at your organization. You can use this tool to build effective teams and increase productivity and improve your relationships within the organization. Microsoft Teams offers a variety of options to help you get started and become more productive quickly and easily.

Teams are created easily. If you have several departments within your organization and need to create a team for each department you can do this easily. Teams are made easy and you can get your teams up and running quickly.

One of the best features of Microsoft Teams is the ability to invite people from around the world and let them work with the same documents and projects. You can have the documents and projects organized and shared in the same way throughout the entire organization, regardless of what country they were created in. You can create a similar project in the same language that they were created in and share it with other employees in the organization.

One of the most amazing features of Microsoft Teams is the ability to have multiple team members edit and view the documents and files in the same way. With Microsoft Teams you can have a document and have people edit the same document at the same time without any problems. The changes that you make can also be seen by other team members and can be modified by them without ever needing to send the document again.

Microsoft Teams is the perfect tool for building a powerful and effective collaboration culture. You can share documents and files in the same way that the rest of the organization can view the information.

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