26 November 2018
As the number of mergers and acquisitions rise, the number of corporations that exist are falling. The number of corporations has declined during the past two decades, and that trend doesn’t appear to be changing anytime soon. Halfway through 2018, there was over US$2.5 trillion in mergers — if this pace continues, 2018 would exceed 2015 with the greatest number of merger deals on record for the year. What this means is that there are the same number of companies, but many more of them fall under the umbrella of a larger corporation; they are subsidiaries, and the corporate hierarchy is only becoming more complex.
This makes the task of searching for an entity you wish to locate another order of magnitude more difficult to navigate. One of the earliest problems corporations face while creating new entities is what to name that new entity. How do you know whether the name you settle on is taken? Where do you go to find information on the structure of an entity you want to do business with? A competitor? This is where entity search comes into play. Entity search is a complicated process, since there is no one central repository for this information that is easily searchable.
Searching state databases
Every state in the United States provides websites that makes information on entities searchable — but the information used to search varies from site to site. If you are looking in five different states, you will likely need five different parcels of information to find what you are looking for. While some require only a name or portion of a name, some may require a filing number and some may have multiple types of searches — the variation from search to search is incredible. This means it is important to have as much information available as possible on the entity you are looking for. The information you can get from these websites varies less wildly than the search options, thankfully. Most search engines resulting in a successful search will yield some combination of the type of corporation, filing number, EIN, mailing address, agent name and address, years of filing and oftentimes the yearly filings in PDF form. All of this is to say that it is much easier to get information on the entity you want when you have complete information.
The state of Delaware is an interesting example of entity search capabilities. The state of Delaware is consistently regarded as the friendliest state in which to incorporate a business, largely because its corporate laws provide the greatest protection of private assets in business dealings, also known as the corporate veil. Delaware’s court system also has a separate branch for resolving business disputes, called the Court of Chancery, and due to the nature of how many cases they resolve in this court, there is extensive case law to draw upon, which results in the court being “widely recognized as the nation’s preeminent forum for the determination of disputes involving the internal affairs of… corporations and other business entities through which a vast amount of the world’s commercial affairs is conducted.” Ironically, Delaware’s entity search is one of the more limited engines of all the states, as it has so many entities to account for that you need to pair a file number with the entity name.
Overseas entity search
This only covers US corporations, however, and due to more lenient tax laws overseas, many businesses will choose to shelter certain assets by incorporating them outside the country where common sense would say they were founded (i.e., the location where the plans to incorporate were hatched). This is necessary for many of the largest corporations to stay competitive, as they will often sell products in diverse markets overseas, which necessitates also taking advantage of differing entity laws overseas. Many multinational corporations (MNCs) will have over half of their holdings overseas, which complicates entity search to a greater degree. Of the manner in which entities are catalogued overseas, the most basic is paper directories, which are available for purchase by the various companies that compile them. The next level of available indexes is a range of databases organized by private firms, which cover various levels of geographic and politically organized groupings of business entities. Some of the titles available in print are also indexed online and side by side with the databases available exclusively online. These comprise some of the more powerful tools available in entity search, but are generally only available when one is a subscriber to their services — in some cases, this can be worth the cost. For example, OneSource indexes information from over 6 million businesses, including the names of key executives and important financial details.
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When it comes to doing business abroad, however, not all companies, or even all MNCs, will have a major presence in the English-speaking world. This adds another wrinkle into what you will need to expect when navigating entity search, and has a multiplicative effect on the options available. Using Search Engine Colossus, you can find databases indexing entities in well over 100 countries, using various languages.
Technology facilitates entity search
There is an incredible variety of options available to approach entity search. With categories such as state, federal, international and private databases, one could say that you have your work cut out for you whenever you set out to identify and collect information on a corporate entity — however, with this wealth of options, it is easier than ever before. Technology has made a huge dent in the time these processes take, with powerful, efficient tools. You can also apply a similar set of tools internally, to manage and control the paperwork, filings and various holdings of your business using entity management software.
Blueprint OneWorld can provide you with a dedicated team of support technicians and salespeople to choose a suite of management tools that will fit optimally within your corporate structure, allowing you to turn your legal department into a non-negative efficiency that will help you keep your filings on time and your structure clear and cogent, operating with incredible synergy to obtain the best possible corporate entity management outcomes. If this interests you, please contact Blueprint OneWorld for a consult today.