Changing Legal Entities: Considerations You Can't Overlook

Modified on: Wed, 9 Jul, 2025 at 11:30 AM

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When a hotel undergoes a change in its legal ownership entity, it's not merely a matter of documentation and contracts. The implications deeply affect operations, particularly within your hotel management system. Lack of careful planning can result in reporting errors, compliance issues, and invoicing chaos. This article outlines key considerations related to Clock that hotels must keep in mind during such a transition.


Why legal changes matter in the context of Clock

Clock is the central system for managing hotel operations, handling reservations, invoicing, reporting, integrations, and guest communications. When a new legal entity takes over, financial and legal responsibilities change, impacting:

  • Invoice issuance
  • Revenue reports and data exports
  • Fiscal connections
  • Third-party integrations (e.g., payment providers)

Clear financial data separation between the old and new legal entities is essential for audit purposes and legal compliance.


Continue or start anew?

Option 1: Continue with the existing Clock account

  • Advantages: No new setup required.
  • Disadvantages: Complexity in data segregation; potential legal and fiscal discrepancies.

These discrepancies can arise due to:

  • Dual invoicing: Reservations spanning the transition date must be split into two invoices, one per entity.
  • Prepayments: Payments made by the old legal entity for stays after the transition cannot be directly transferred.
  • Receivables management: Payments must be managed by the same legal entity that issued the invoice.
  • Institutional reporting and data export: Reports to institutions can become inconsistent if reservations and revenues aren't clearly separated by legal entity.

Integrations and payments:

  • The new legal entity will require a new fiscal account.
  • Typically, a new KYC (Know Your Customer) process is necessary with payment providers like Adyen.

Option 2: Creating a new Clock account

  • Advantages: A fresh start for all financial data; optimal for regulatory clarity.
  • Disadvantages: Requires migration efforts.

Based on previous experiences, creating a new account has proven to be the superior solution.

Data migration considerations

Clock can assist your transition by:

  • Copying system configurations, pricing, and structures
  • Importing future reservations up to the transition date
  • Re-establishing integrations and fiscal services
  • Support during activation and initial setup

What happens to the old data?

  • You can retain read-only access to your old Clock account.
  • This access incurs a minimal monthly fee.
  • Useful for references, disputes, and tax audits.

Conclusion: Plan wisely, transition smoothly

Changing a hotel's legal entity is complex, but with the right strategy, you can avoid technical difficulties and compliance issues. Collaborate closely with Clock to ensure:

  • Clear separation of financial data
  • Seamless restoration of integrations
  • Continuous fiscal reporting

Clock is here to guide and support you every step of the way.


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