Having one director responsible for multiple countries makes for fast, efficient and effective management. But there is a downside: if that person is replaced for whatever reason, you need to notify that change to the relevant authorities in each of those countries individually. And, of course, each country has its own rules and paperwork about what is required, how, and when.
One director times eight countries = eight processes
That was the scenario facing our client, a leading provider of industrial automation and test and measurement solutions. It had one sales director responsible for eight sales offices across Europe. So when that person moved to another job, corporate legal was faced with notifying eight jurisdictions of both the departure and the replacement. That would be time-consuming and distracting amid all the team’s other work.
Although each country has its own requirements and process, complying with each one is not an insurmountable problem. It is just a question of figuring out, country by country, what conditions must be met and who needs to do what, how and when. But unless it is something you do regularly, it is time-consuming, and it diverts in-company legal counsel from their other work. This is why many companies decide to employ a local legal firm to do the work in each jurisdiction. The downside of this is that the client then has to manage multiple processes and it is expensive.
One director times eight countries = one process
Legadex was able to offer our client a third, more time and cost-efficient option: our expertise and established workflows for registering change of director appointments per jurisdiction. This is a service we provide on a standalone basis or as part of our Corporate Managed Services offering. It is also something we do regularly for multiple clients every year.
In our client’s case, they had neither recent experience of registering a change of director, nor the time to research and run the process themselves. It was simply more efficient to have someone else do it, a specialist, and easier still to place the work with one party rather than multiple law firms.
Assimilating different processes into one workflow
Our first step was to draft a set of shareholders resolutions covering the countries that would be asked to note and record the appointment of the new director. The challenge here was that different European countries have different rules regarding the adoption and registration of shareholders resolutions. Within our client’s footprint, some countries would accept digital signatures while others required an apostilled pen and ink signature.
The actual registration process also differed from country to country. This ranged from submitting a single form to running through a combination of additional and wide-ranging requirements: completing multiple documents; submitting a character reference about the person’s ‘fitness’ to hold the position; organising a meeting between a local lawyer and the appointee; summarising the resolution confirming the appointment, and other requirements
As the lead partner, we guided our client through these stages and identified the information each country would require. This included explaining what action the client needed to take and managing the supply of timely and accurate information to our legal partners where local completion would be needed.
Time saved = more time for other legal work
The central benefit of placing this process with Legadex was the time it saved, time our client could devote to more productive work without fear of being interrupted by small but niggly questions. After all, why become an expert in something you will probably only need to do once every few years?
The other benefit was efficiency. This played out in the client knowing what action they needed to take when – because we kept them informed – while limiting the work required of local lawyers to just the completion phase.
In total, the client saved three to five hours of work per country involved. They also got just one bill and the security of knowing that everything required has been done.