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Audit legal entity changes in Lextree

New clients often want to know how to view legally significant changes to their legal entities managed in Lextree. Changes in name, status, or jurisdictional filings are important.

Lextree provides several ways to access (or audit) historical information about legal entities. Where to look and how to use Lextree for auditing depends in part on what information you need.

Document history

Lextree preserves the full document history of any legal entity. On the Documents tab, all documents added to the legal entity record are preserved. Even when they expire or their legal effect is altered by a subsequent event or document, the historical document remains, including the metadata.

Here are a few ways to manage documentary evidence of changes to the legal entity for future audit:

  1. Create a folder of documents labeled "Historical Records", or "Change Events."
  2. Add effective and expiration dates to documents. This will allow you to run reports which "show all documents expired before today," or "Effective during 2018."
  3. Create a Document Type called "Historical record" or "Change event." This is similar to #1. We do not recommend doing both. You can use Folders and Documents Types in combination to create subclassifications.

All of this data is available in Reports > Entities > Documents which will give you a view across all of your legal entities.

Officers and Directors

One of the places purpose-built for auditing is the People tab for a legal entity. The People tab is where you manage officers, directors, and other people (or organizations) related to a legal entity.

Audit Officer and Director Changes

For each officer and director, you can set terms of service. Check the Track term of service? checkbox to establish an Appointment Date and a Term Expiration date.

There are generally a few circumstances for which you want to track terms of service.

Historical Board or Management Composition

If you want to know who was on the board during a certain period, then Lextree’s reports allow you to set a date range and generate a list of officers and/or directors during that period.

In this case, you would leave the Term Expiration field blank until the person left the board or the management position, at which point you want to add the date of the expiration.

Terms of Service in Organizational Documents

Some entities, notably charitable or non-profit organizations, often require that board members serve for a time and then are subject to election or reappointment.

In this case, you preemptively add the expiration of the term for an individual and even schedule an alert.

Officer and Director Audit Reports

In either case, historical audit data about who served on the board or as an officer is available in Reports > People & Organizations.

You can run reports on just officers or directors or both. You can also run reports narrowed by legal entity and date range. For example, you might run a report showing all Directors of Great NewCo, Inc. who left the board before June 1, 2019.

Ownership changes

Like officers and directors, Lextree allows you to audit historical ownership changes in the Owners tab.

You can keep track of ownership changes in Lextree with the Disposition Date and Status settings. Rather than delete an ownership interest record, simply mark the ownership as Inactive as of the Disposition Date. Lextree will remove the ownership from the org chart automatically, but preserve the data for audit reporting at Reports > Entities > Parents & Subsidiaries.

Tasks

Task auditing is available in Reports > Tasks > Tasks. A report of all tasks, completed or outstanding, is available for any group of legal entities.

Auditing Task Information

Lextree preserves all task history in the entity record. If you need more background on the task than is available in Reports, then you can view the full task history for an entity.

Simply navigate to an entity, Entities > [Name of Entity] > Tasks. On the Tasks tab you can access all In Progress, Completed, and Canceled tasks for that entity.

Auditing Task Document Changes

Lextree also allows you to access all changes to documents created or modified in the course of a task. At the top of the task, the File field displays the most recent version of the document related to the task. You can see the entire history of the document and view its contents on the Document History tab of the task.

User-Based Audit Information

The word "audit" means different things to different people. Lextree focuses on providing detailed information about legal entities to help organizations visualize ownership in the company org chart, as well as manage compliance and risk.

The auditing options described above serve those objectives. However, some organizations want to know which of their users made changes to specific entity information. Lextree supports these needs in two ways: 1. with standard features located at key points throughout the product and 2. with custom reports available in our Enterprise Edition.

Business Edition User Auditing

The Business Edition of Lextree provides user audit trail information in two ways: Last Updated and Tasks.

Last Updated

Lextree collects and displays user events in the Last Updated field. In almost every table of data, Lextree displays a column called Last Updated.

For example, you can see the audit trail of everyone who has modified a specific document in a legal entity.

Audit Document History Last Updated

The date and time are a hyperlink. Click on the link to see the history of that item.

User Audit Document History

Tasks

Each task contains detailed information in the Status History, Document History, and All Comments tabs. Those tabs automatically save and display all changes made by each user.

Enterprise Edition

For clients who need a more detailed audit log of changes by users, we offer our Enterprise Edition. The Enterprise Edition has several benefits, but the most relevant is the ability to design custom reports to your specification.

Our professional services team is available to create an audit report using a wide array of Lextree data. We can build that audit report to your suite your needs. Custom audit reports are completed on a fixed bid basis so that you know exactly how much it will cost in advance.

Conclusion

Lextree is a comprehensive repository of data about your legal entities and compliance requirements. You can run reports to audit legally significant changes to any or all of your legal entities.

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