LEGAL AUDIT OR BUSINESS DUE DILIGENCE

Today, many Ukrainians are considering possible options for buying an established company or a functioning business abroad, including in the territory of the European Union. Of course, for Ukrainians these are new opportunities and a new market for economic activity, however, if we are considering with you the purchase of corporate rights of an already existing company, it is necessary to take preparatory measures to protect yourself and your business in the future.

The main method of such protection is a systematic and competent review of the company's activities - Audit. It is carried out so that the company and its officials and owners are ready for inspections by the controlling state authorities.

We draw your attention to the fact that the audit must be carried out in various areas of the company's activity, in particular:

•  checking the status of documents for compliance with local legislation;
•  compliance check for opening a bank account;
•  checking concluded (extended) contracts;
•  checking the availability of all permit documents and their correctness;
•  verification of the company's corporate documentation;
•  verification of compliance with the norms of labor legislation;
•  accounting audit;
•  verification of submission of tax reporting;
•  identification of risks, assessment of the risks of contesting concluded agreements and preparation of legal opinions regarding investment objects (if available);
•  analysis of disputes, legal proceedings;
•  preparation of the company for sale.

Depending on the above, there are at least two types of business verification, namely:

Full due diligence report (full scope) – the most detailed and complete analysis of all provided documents, open sources of information, as well as sources of information with limited access.

Selective due diligence report (red flag report) — only those questions raised for research are checked.

In addition, it is fair to note that the results of such an audit often become a decisive factor influencing the decision on the feasibility of purchasing a particular asset. In addition, the results of due diligence can serve as an additional argument for continuing negotiations for a possible price reduction.

In our experience, these reviews are often requested in the following cases: purchase and sale of a company, public offerings of securities on the stock exchange (IPO), mergers and acquisitions (M&A), assessment of the investment attractiveness of companies, creation of a joint venture, commercial lending, purchase of real estate property, provision of loan funds, targeted financing.