Soxhub Inc. said this week it had received a minority investment from Donnelley Financial Solutions Inc. as part of a partnership between the two companies.

Soxhub, a Santa Monica compliance software company, said Donnelley’s stake in the company is “significant,” but declined to specify a dollar figure.

Soxhub makes cloud-based software specifically designed to address financial reporting requirements under the Sarbanes-Oxley Act. Jay Lee, the company’s vice president of business development, said the transaction gives it a partner in the financial compliance space to help move the business forward.

“For us, it’s great to be strategic partners with (Donnelley),” he said. “It allows us to focus on building a best-in-class solution to clients’ (Sarbanes-Oxley) reporting needs.”

Sarbanes-Oxley – commonly referred to as SOX – is part of a set of financial regulations put in place after the Enron scandal to ensure accurate accounting by companies. Lee said that even though the act has been on the books for some 15 years, the vast majority of companies who are required to file compliance reports by the law do so through a complex web of spreadsheets.

Donnelley’s president of global capital markets, Craig Clay, said Soxhub’s specialized software met a huge market need for its clients who often complained about the strain Sarbanes-Oxley reporting put on their companies, both from a labor and financial perspective. Some larger companies can spend millions of dollars on this reporting, he noted.

“In talking to our clients about what their pain points were, we kept hearing about Sarbanes-Oxley,” Clay said. “About 95 percent of companies are still managing their SOX reporting manually.”

Clay said that at first Donnelley, which is based in Chicago, thought about developing its own software in-house to tackle this reporting, but after looking into it found that wasn’t ideal.

“As a company, you start thinking about how you can solve clients’ problems,” Clay said. “We already had our ActiveDisclosure financial reporting tool, but it seemed like we needed something purpose-built for SOX. Then when you start calculating what that takes and the time to market, it made sense to find another solution.”

That solution turned out to be Soxhub, which began as a sort of unofficial partnership with Donnelley about a year ago and has now turned into a more formal arrangement.