Entity management software is a register of every company in a group, in every country, with its directors, shareholders, registered address, filings and deadlines. Each registered company is called a legal entity. The software is often sold as part of a board portal product.
A large group can own hundreds of legal entities. Each one exists for a reason: a sales company in each country, a company that owns a factory, a company that holds a patent. And each one has legal duties in its own country. It must hold board meetings and an annual general meeting (AGM), file its accounts, file a list of its directors and shareholders, and report any change of director within a fixed time. A missed deadline brings fines, and in some countries the directors can be disqualified.
Without this software, the information sits in spreadsheets kept by different lawyers and company secretaries in each country. When a bank or an auditor asks for an up-to-date list of a subsidiary's directors, someone has to go and find it.
Here is a typical case. An engineering group in Mumbai has 46 legal entities in 11 countries. One of them is an Indian subsidiary that makes valves, whose financial year ends on 31 March. The software holds that company's calendar. It must hold its AGM by 30 September. Within 30 days of the AGM, it must file its financial statements with the Registrar of Companies, on form AOC-4. Within 60 days of the AGM, it must file its annual return, on form MGT-7. On 1 September, the software reminds the company secretary that the AGM deadline is 30 days away. In November, one director resigns. The software records the change and starts the 30-day count for filing form DIR-12, which reports the change.
The register also shows the group's structure: which company owns how much of which. Banks need this chart for know your business (KYB) checks before they open an account. Tax teams need each entity's GST and VAT numbers, which indirect tax software uses. For a young company, the record of who owns its shares, including employee stock options, is kept in cap table management software. When a group buys a company, every new entity is added to the register. The figures of each entity are added together in financial consolidation.