Legal audit as a type of audit performed before intended acquisition (merger) (legal aspect of a due diligence review)
includes:
- examination of entity’s constituent and internal documents (bylaws), analysis of ownership structure and organizational structure of an entity;
- identifying the owners, trustees and related parties;
- observing the principal legislations regulating entity’s performance, checking availability of licensing papers;
- checking availability of the documents granting entity’s title of main assets (real property, intangible assets, etc.);
- analysis of the system of managing bodies and labour relations between an entity and its employees;
- analysis of existing encumbrances;
- examination of the main contractual aspects of entity’s performance;
- examination of lawsuits and other litigations (including those involving public executive authorities, like controlling bodies, and local governments).
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