Multi Family Offices (MFOs) or Shared Family Offices (SFOs) are becoming increasingly popular for asset and investment management of high net-worth individuals and families. For families with net-worths in the range of more than $50 million, the use of MFOs is becoming increasingly popular.

Why are multi family offices becoming popular?

Even for the wealthiest families and individuals, operating a family office can be expensive, sometimes even prohibatively expenvise. Operating a family office is analogous to an operating company or investment firm. To function properly, it usually requires an incredible amount of resources, mostly dedicated to full-time staff and professionals involved in the management of the family office. Some of the typical roles found in a family office include:

• One or more full-time lawyers acting as general counsel
• One or more full-time accountants for general accounting and tax planning
• Various investment professionals with specialties depending on the investment thesis of the family office
• Analysts supporting the investment professionals
• Management team for general business administration of the office
• Office staff including reception, secretarial, administration, IT etc

As you can see, operating a family office can be strikingly similar to the needs of operating most any other business. Accordingly, the financial needs and resources can also be very demanding. Because of this, the rise of the multi faimly office has been prevelant.

A single multi-family office may have hundreds of investments across different companies, meaning the multi-family office and its professional advisors could be managing as many legal entities as a small law firm. It is not rare to find multi family offices that have large minute book collections that they themselves manage. Complicating things slightly, a multi family office may have additional needs unique to the way they conduct business, which includes subsidiary management corporate governance as well.

How do family offices manage legal entities?

Step 1: Digitize your minute books and corporate records

Family offices usually have a full time physical office where they might be storing minute books related to various investments and legal entities. If the family office does not maintain a full time physical office it will be important to have a virtual setup that allows for the easy sharing of information. For example, if your accountant, lawyer and investment advisor do not maintain regular hours at your family office or work from their own office, you will want to ensure you centralize your minute book collection so that they are easily accessible by each individual.

To centralize your family office minute book collection, you'll want to start with pre-digitized minute books (i.e. already PDFs). If you do not have pre-digitized PDF minute books that are searchable then you will want to spend some time digitizing your collection or hiring a professional company to scan and digitize your minute book collection. Once everything is digitized, find a secure minute book cloud to store your corporate minute books and the corresponding data. Once this is done, everything will be centralized and you can add your various colleagues to your virtual platform so they can collaborate on entity management. Alternatively, you can just share select books with various stakeholders as needed.

Step 2: Share your minute books with all of the appropriate stakeholders including lawyers, accountants and investors

A proper entity management solution will allow you to choose whether to share the following:

• All minute book pages
• Only some minute book pages
• Only some minute book sections (i.e. [By-Laws](/glossary/company-by-laws), Resolutions etc)
• The legal entity database
• Ledgers & registers
• Bookmarks & notes

If the entity management solution you are using does not provide these sharing choices, it probably is not suited for minute book and corporate record management. Additionally, when you are engaged in a transaction or need to provide temporary access to legal entity information, your centralized solution should also provide the ability to set an expiry link so you can terminate access to a minute book at a given point in time and do not have to worry about tracking what information has been shared and with whom.

Step 3: Migrate or input data about the legal entities into a corporate database

Once everything is scanned and cenrtralized for your multi family office minute book collection, you'll want to make sure you make annual corporate governance easy for your team by entering the information into the entity database. If you are using an existing on-premises solution like FastCo, Alf, Enact or Corplink, you may wish to migrate that legal entity data over to your new cloud solution.

If you are going down the path of migrating from one legal entity management solution to another, make sure you are migrating to a platfrom that is setup for instant migration. Otherwise, you will have to manually check that all information is migrated correctly, and you might also find yourself doing the migration slwoly and manually, which will greatly increase your costs.

Once you have migrated or entered all of the relevant entity information, you will have a robust database containing all the relevant corporate information for the entities you manage in your family office. This will make keeping track of all sorts of information exceptionally easy, including:

• Annual filings dates
• PPSA exipries and renewal dates
• Business name expiries and renewal dates
• Asset expiries like patents and trademarks
• Ownership interests in land

Additionally, with a centralized entity database you will be able to keep track of important informatio across different entities and subsidiaries including:

• Corporate directors including appointment and resignation dates
• Corporate officers including appointment and resignation dates
• Past present and future shareholders in all legal entities
• Authorized capital and share structure of your investments

What's next?

So, how do you best manage legal entities for multi family offices? It starts by making sure your collection is digitized and centralized on a secure online platform, preferably one designed with minute books and corporate records in mind. Once everything is centralized, share the minute books with the appropriate stakeholders and professionals. Then migrate your data from an existing entity management solution or input it yourself into a database that puts all the corporate information at your fingertips. Use legal entity management software that works for you. Using these steps you will find it much easier to manage your multi family office.

Of course, if you need any assistance scanning, digitizing or getting your minute books onto a secure legal entity management cloud we are always happy to help and provide advice, just get in touch!