As the number of legal entities grows exponentially, organizations are looking into ways to optimize their entity management, improve the efficiency of their legal teams and compliance work and use their data most effectively. Digitizing corporate minute books becomes not only a "nice to have" but a necessity for effective compliance work in a modern remote environment with multiple legal entities registered across several jurisdictions.
Those organizations who are interested in digitizing their minute books should have a clear understanding of the end result, work out an optimal structure, determine the expected user experience and have a detailed roadmap for digitization. Below is a brief overview of a virtual minute book, its key differences from a simple scanned copy and a general outline for the migration process.
What Is a Virtual Minute Book?
There are certain misconceptions about a virtual minute book, which is often confused for a scanned version of paper documents. This misconception is mainly explained by the previous practice of running electronic copy of the physical minute book, which was stored locally or recorded on burned CDs.
Indeed, in the past, a digital minute book was just a scanned version of paper documents. A scanned minute book was a step forward compared to a paper version because it provided the ability to share documents by email or have it on someone's desktop instead of going to the office for a physical binder each time some needed access.
Today, a virtual minute book is not just a scanned copy of the physical version. When legal professionals migrate to a virtual minute book, they still scan paper documents but don't keep the latter in the physical form, taking the electronic version as an original.
What Are the Key Differences Between Virtual Minute Book and a Scanned Copy?
When a physical minute book is digitized, the virtual minute book becomes the single source of truth about the organization. There is no toggling between the physical and digital versions of the minute book as there is only one version of it in the electronic format.
When corporate records are digitized to create a virtual minute book, they are kept on a secure cloud, accessible with restricted access to multiple users from any device. Unlike physical documents in binders or their scanned copies, the records in the virtual minute book can be organized in many ways depending on the user choices for section level, document level, chronological or reverse chronological order and other structuring approaches.
What Are the Benefits of a Virtual Minute Book?
A virtual minute book presents organizations with multiple benefits which bring their compliance work to a completely different level.
No reliance on paper documents. By switching to a virtual minute book, companies no longer have to keep documents in their paper form. Since physical minute books can be quite massive, especially for larger organizations with dozens or hundreds of legal entities, digitizing a minute book saves considerable time and space. In doing so, companies don't have to provide for the safekeeping of their paper documents or worry about what happens if some of them are accidentally lost or destroyed.
Saving considerable time and effort. After companies digitize their corporate records, they save a massive amount of time needed to run both physical and scanned minute books, send documents for physical signature and scan them after they are fully executed. With virtual minute books, documents are signed electronically without printing out, which speeds up approvals, filings and transactions by many times.
Having information at fingertips. When a minute book is kept in physical form, business owners and employees cannot access it without turning to a company lawyer or an accountant. After the COVID outbreak, companies realized they could only operate effectively if they could access their data remotely at any time. By digitizing their minute book, organizations can have information in a convenient format at their fingertips, always accessible from any device or platform.
Safely sharing and updating information in real time. In a modern business environment, teams need safe access to information to cooperate in real time, update their data and do the transaction work. By digitizing their minute books, team members can share information instantly on a secure cloud without sending corporate documents by email, making their data vulnerable to hacks or accidental exposure.
Transitioning to a Virtual Minute Book
Many businesses who consider migrating their physical minute book into digital format are concerned about the effort needed to complete the transition. Companies want to ensure that all their corporate records are safely digitized without anything being lost in the process and that the final result meets the expectations of the board, management and legal team.
An effort can be considered a success when the expectations are fully met, and the transitioning is complete within a specified time. To this end, at the beginning of the transitioning, it is essential to:
- do a research on each jurisdiction to find out which documents can be held in electronic format,
- develop a clear vision of how the digital minute book should look like,
- determine an optimal structure for the virtual minute book,
- define the end-user experience, including access rights and editing rights.
Digitizing a minute book is an essential step in improving the overall effectiveness of your Governance, Risk and Compliance work. This effort should be endorsed by the board and key decision makers to have their full support when the process is underway.
It is also essential to involve an experienced migration team, like Athennian, to assist with outlining, preparing and implementing the digitization process to ensure the final result and account for all the details.
Contact Athennian for More Information
With the emergence of electronic signatures, digital-only documents, and regulatory changes in multiple jurisdictions allowing keeping corporate records in digital format, virtual minute books are becoming an industry standard.
Digitizing minute books changes how companies approach their compliance, use their data and manage their legal entities. If you are interested in learning more about a virtual minute book, the digitization process and available options, please don't hesitate to get in touch with the Athennian team for a free consultation and demo.