Legal audit analyzes the compliance of a company’s documents, contracts, and legal obligations (legal diagnosis of a company’s activities).
Its purpose is to identify risks and provide a clear picture of the business’s legal status.
Conducting a legal audit is particularly recommended in the following situations:
- preparation of the company for attracting an investor, selling the business or transferring shares/ownership interests;
- reorganization of the company, including merger and/or division of the legal entity;
- change of management bodies or ownership structure;
- the need to align the company’s activities with new legal requirements;
- preparation for inspections by tax authorities, labor inspectorates or other regulatory bodies;
- periodic performance of a legal audit in order to maintain legal compliance and stability of internal processes.
What is reviewed during a legal audit?
The scope of the audit is tailored to the specific characteristics of each legal entity and generally includes:
- constitutional documents and corporate acts (articles of association, resolutions of management bodies, minutes, internal orders);
- contracts with partners and counterparties, including analysis of risks and unfavorable or non-compliant clauses;
- licenses, permits and authorizations required for business operations;
- personnel documentation, individual employment contracts and compliance with labor legislation;
- tax obligations and related filings;
- intellectual property rights;
- existing litigation and potential litigation risks;
- compliance with personal data protection legislation.
Why does a business need a legal audit?
A legal audit contributes not only to risk prevention but also to strengthening the company’s legal position:
- Prevention of sanctions and inspections early identification of non-compliance allows avoidance of fines, administrative sanctions and financial losses.
- Securing contractual relationships
Audit helps identify and eliminate dangerous or unbalanced contractual clauses. - Strengthening litigation position
A company with a solid legal structure is better prepared for negotiations and court proceedings. - Increasing trust of investors and partners
Transparency and legal order represent a significant competitive advantage. - Decision-making confidence for the owner
Accurate knowledge of the legal status of the company allows focus on strategic business development.
How we conduct legal audits at BAA “Legal Service”
“The Bar Association “Legal Service” (BAA) approaches each legal audit with the highest level of professionalism, individualized attention and strict confidentiality.
The procedure includes the following stages:”
- analysis of the company’s business specifics and definition of audit objectives;
- collection and review of relevant documentation;
- identification of legal violations, risks and vulnerabilities;
- formulation of legal recommendations to remedy identified deficiencies;
- provision of legal assistance in the implementation of corrective measures.
