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Audit of a legal entity in Belarus

Audit of a legal entity in Belarus Due Diligence

Audit of a legal entity is an independent assessment of the company's activities, carried out from various parties. As part of it, risks are identified and analyzed, compliance with legislation and standards is determined, as well as the reliability of the data provided on the financial position and performance of the company.

Features of legal audit

Any organization that plans to enter into a significant contract, or an investor who wants to buy a business, must be confident in the profitability of this solution and its security. Due Diligence audit will help to make sure of this. This is a special comprehensive check, which is used in practice all over the world. Every year the need for legal audit is only growing. The demand is mainly due to the improvement in the quality of this procedure.

What is Legal Due Diligence for?

Legal audit is required in order to establish the presence or absence of entrepreneurial risks. As part of it, recommendations are developed to minimize them as much as possible, if necessary. Risks are sometimes caused by a violation of the procedure for state registration of a legal entity, the procedure and terms for creating an authorized fund, etc.

Reasons for due diligence

In world practice, the legal audit of an enterprise is carried out at certain stages of its development, namely:

  1. seed. When an idea or project is born. You need to analyze it in order to reject or decide on the appropriateness of funding.
  2. start up. The organization has just come into existence. Required in order to determine the feasibility of funding.
  3. early. It is carried out to painlessly transfer the product from the creation stage to the implementation process.
  4. expansion. Marketing research is carried out when the organization enters new markets or when production increases.
  5. Bridge Financing. In this case, the legal audit of the organization is carried out in order to assess the feasibility of financing a company that is being transformed from a private to a public JSC.
  6. BIMBO. A legal audit is carried out for organizations that are going to raise funds for the purpose of acquiring a business or for a buyout from outside.
  7. turnaround. It is also important to carry out analysis during periods of crisis in order to find ways out of it.

In addition to the above, legal due diligence services are needed when there is a change in management, a decrease in competitiveness, receiving assistance from sponsors, and many other situations.

What does Due Diligence include?

Legal due diligence of the company includes the following:

  • verification of the legal status of the organization;
  • analysis of the corporate structure;
  • verification of legal support of business;
  • study of labor relations;
  • verification of tax activities;
  • analysis of property and transactions with them;
  • assessment of compliance with legal regulations and regulatory requirements.

It should be noted that the above list is not complete. It can be expanded, depending on the tasks set by the organization.

Stages of legal due diligence

It is important to note that the stages of the audit of a legal entity depend on the tasks set. In general, it is done as follows:

  1. Acquaintance with the history of the enterprise. Constituent documents are checked, the history of changes in information in the Unified State Register of Legal Entities.
  2. Analysis of the corporate structure. As part of the audit, it turns out which management bodies operate in the company, as well as what powers each of them has.
  3. Checking transactions. The contracts concluded by the counterparty are viewed. The execution and authority of those responsible are checked.
  4. The study of work with personnel. Employment contracts, local acts and other personnel materials are analyzed.
  5. Analysis of vehicles and real estate conditions.
  6. Study of activities that are subject to licensing.
  7. Checking the company's intellectual property rights.

Based on the results of the above, it will be possible to assess the consequences of violations and correct them in a timely manner.

Legal audit results

When conducting a Due Diligence audit, you can expect to receive the following results and conclusions:

  1. Identification of risks and problems that are associated with the organization or assets that are subject to acquisition or investment. These include legal disputes, operational shortcomings, etc.
  2. Assessment of the financial condition. Reports and financial indicators of the organization or assets are analyzed. The results can give an idea of ​​the stability of the firm, its profitability and solvency. Helps to identify potential for further development.
  3. Assessment of legal validity. The analysis allows you to identify problems, disputes or inconsistencies that may affect the transaction.
  4. Evaluation of the company's operating activities. The results show performance, optimization and improvement opportunities.
  5. Definition of value and potential. Industry trends, competitive environment and other factors affecting success and profitability are analyzed.

As a result of Due Diligence, a professional conclusion is drawn up. It includes a detailed report that displays risks, their assessment, recommendations for minimizing them, etc. By contacting Legal Time in Belarus, you can additionally consult with specialists to get more detailed information about the audit.

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