Legal Entity Names

JUNE FEATURE – THE IMPORTANCE OF ESTABLISHING DEBTORS WITH CORRECT LEGAL ENTITY NAMES

Legal names / previous company names / trading names separated on Credit Details screen

By: Richard Kernick / IT & Business Development
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An update to the CRISworks system was implemented Friday, 24 June, 2005.
 
Previously, company names have been displayed as "Legal Name" (from the Companies Register) and "Trading Names" (as identified during CreditWorks data matching process).
 
With the implementation of the NZ Companies Office Company Amendments service, we are now in the position of identifying company name changes.
 
Effective from 24/6/2005, the Credit Details screen will be updated to reflect:
-Legal Name of company
-Previous company names (and date changed)
-Trading Names
 
A sample screenshot is detailed below.

 
 
 CRISworks user manuals have been updated to reflect this change.

It is important at this point that we take some time to explain why these changes to CRISworks are significant and why they have been implemented. 

Debtor matching of vendor debtors into the CRISworks system is an ongoing and continuous process, as new debtors are added to Vendor databases, or new contributing subscribers join the CRISworks system.  The resultant data cleansing which flows from this process is passed back to subscribers by way of regular spreadsheets so that any incorrect or uncertain data can be examined and action taken.

CreditWorks has increasing concern for its subscriber partners in that there are significant numbers of company debtors being found with incorrect names i.e. at variance with the actual name registered at the Companies Office, or having names that do not exist at the Companies Office.  The number of instances would suggest that account establishment routines may need to be re-examined so as to prevent what could be potential for loss for vendors, should a particular incorrectly named debtor become a bad debt.  All finance providers should be aware that invoicing or other documents which constitute evidence of a debt having been created, and which do not have a correct legal entity named therein, may well prove unenforceable as to value in any proceedings against the debtor.

The following suggested method, if used when setting up new company trade debtor associations, would ensure that not only that the correct company is identified, but that vendor documentation be also fully correct and enforceable. It will also enable easy completion of the matching process into the CRISworks database:

1. Prior to documenting and recording any new relationship which involves a company, obtain a copy of that company’s Certificate of Incorporation.

2. On receipt of the Certificate, access the Companies Office database via CRISworks (which is up to date within the hour) to obtain full information on  names and addresses of directors etc.

3. Complete documentation with the company name, with appropriate execution by at least 2 directors where there is more than one director listed, or by the sole director otherwise.  [The only exception to director signing should be where the proposed signatory is a designated company officer, e.g. Chief Financial Officer. Such designated persons would normally only be found within large companies.

4. Load account into Vendor’s accounts system.

By following this straight-forward process, correct legal names will always be recorded and our contributing partners will be in best possible position as far as documentation of the relationship and dealing with any issues that may arise in the future.