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Legal audit (due diligence) of a company

During a long time, we provide services for business, such as a legal audit (due diligence) of enterprises in Kyiv city.

When client order this service, they do not always understand a content and process of a legal audit (due diligence) of an enterprise. Due to it, it’s worth to review this service in more details.

What is a legal audit or due diligence?

Legal audit of company (due diligence) is a regular internal legal check of an enterprise. The audit purpose is a comprehensive professional analysis of a legal entity activity. So that it is possible to discover weaknesses of an enterprise and to prepare recommendations concerning a building of business legal security.

Issues processed at a legal audit:

  1. Legal audit of the company organizational structure.
  2. Legal audit (due diligence) of founding documents, permits, other documents supported the company business:
  • analysis of Articles, minutes of general meetings of members;
  • analysis of registration documents (Registration Certificates issued by state authorities and facilities, extracts, statements of state registers);
  • analysis of permits (licenses, certificates and others).
  1. Due Diligence of corporate relations and availability of the company management monitoring:
  • analysis of general powers of members (founders) of a company;
  • analysis of lawfulness and correctness of prior transactions in alienation of shares in the authorized capital (if any) by members (founders);
  • analysis of correctness of formation (increasing, reduction) of the authorized capital by members (founders);
  • analysis of the powers of members (founders) regarding the company financial activity monitoring;
  • analysis of the powers of members (founders) regarding the company executive body monitoring;
  • analysis of the powers of the company executive body.
  1. Legal audit of the company activity (including licensed types of activity).
  2. Legal audit of other specific areas (courses) of the company activity.
  3. Due Diligence audit of the company branches and offices activity (if any) in Kyiv, Lviv, Kharkiv, Odesa, Dnipro, Zaporizhzhia, Vinnytsia and regions of Ukraine.
  4. Legal audit of the main contracting activity:
  • contracts with the main contractors are analyzed;
  • a legal examination of an office lease agreement is carried out;
  • analysis of other contracts used in economic activity.
  1. Legal audit (due diligence) of human resource documents:
  • analysis of collective agreement concluded by an enterprise and employees;
  • analysis of a labor contract concluded with a director of a company;
  • analysis of collective agreements concluded with employees of the company;
  • analysis of duty instructions;
  • analysis of other human resources documents.
  1. Legal audit (due diligence) of available assets of a company:
  • analysis of tangible and intangible assets;
  • analysis of available restrictions and encumbrances of property, etc.
  1. Legal audit of internal documents in securing of non-disclosure of confidential information.
  2. Due Diligence of internal documents secured the procedure legality during inspection of an enterprise by supervisory authorities and on determination of actions at such inspections.
  3. Legal audit of internal documents secured proper registration of personal information of employees and counterparties.
  4. Legal audit of internal documents on intellectual property objects of a company (marks for goods and services).
  5. Due Diligence of lawfulness using of a proper software at the company economic activity.
  6. Legal audit of available law cases or claim cases.
  7. Legal audit of relationships of an enterprise with bodies of state authority and administration, law enforcement agencies.

At the process of legal audit of the company, the stated above issues may be specified depend on type of activity of a legal person and available or absence of necessary documents.

Process of an enterprise legal due diligence:

Legal audit (due diligence) of enterprises, in Kyiv and other cities of Ukraine, includes the following actions:

  1. Analysis and processing of all received documents, information about a company.
  2. Provision of information on conformity or non-conformity of received documents, position of the company to the current legislation of Ukraine.
  3. Practical recommendations as to brining documentation and affairs of the enterprise into compliance with the current legislation.
  4. Drafting and preparation of necessary documents in accordance with legal due diligence opinions.

It is necessary to provide the following document for audit:

  • copies of registration documents;
  • copies of founding documents;
  • copies of permits (licenses, permits, certificates);
  • copies of documents about branches and offices;
  • copies of agreements with main contractors;
  • copies of other agreements;
  • copies of human resources documents (main orders, labor contracts, duty instructions and other documents);
  • copies of the company documents on real estate;
  • copies of documents on movable property of an enterprise and other assets (including intellectual property);
  • copies of documents secured non-disclosure of confidential information;
  • copies of documents secured the procedure legality during audit;
  • copies of documents on registration of personal information of employees and counterparties;
  • copies of documents on software used in economic activity;
  • copies of documents on available law cases or claim cases;
  • copies of other necessary documents.

Length of legal due diligence of an enterprise:

Length of the legal audit constitutes in general is up to 3 months after receiving all necessary document.

Cost for legal audit of a company:

Cost of a project realization in legal audit of a company is determined in two variants:

  1. Pay by an hour.

Based on a pay by an hour and expected necessary time for legal services, there is determined an estimated total price of a case. Further, at the end of each current month, there is paid a proper part of the money under the provided report on spending time for legal audit in this month.

  1. Fixed payment.

Amount of fixed payment is determined depending on complexity of project category and a length of a specified project. In addition, a fixed payment amount is also proved by available prices for hourly work.

If you have any questions about a service “Legal audit of an enterprise”, we recommend you to appoint consultation in the office of our Law Office.

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