Legal Audit of a Company
A legal audit (due diligence) is a thorough review of a company's legal situation. It is carried out before an acquisition, investment, merger, or any significant transaction involving the company. The goal is to identify legal risks that might affect the value of the deal or expose the buyer to future liability.
We conduct audits for buyers, investors and sellers, as well as for companies that want to assess their own legal compliance independently of any transaction.
When is a legal audit needed?
- Before acquiring shares or an enterprise
- Before a merger, demerger or restructuring
- Before an investment round or bringing in a new partner
- As a standalone compliance review (independent of any transaction)
- Before granting or obtaining financing secured on company assets
What we review
The scope of each audit is tailored to the client's needs and the nature of the transaction. A comprehensive legal audit typically covers:
- Corporate documents: articles of association, shareholder register, share ledger, minutes of shareholders' meetings and board resolutions, KRS entries and their accuracy
- Contracts: key commercial agreements, lease and rental contracts, loan and credit agreements, distribution and agency contracts, NDA and non-compete clauses
- Employment law: employment contracts, B2B arrangements, internal regulations, collective agreements, pending or threatened disputes
- Intellectual property: trademarks, copyrights, software licences, domain ownership, IP assignment agreements
- Real estate: title to properties, lease terms, encumbrances, land and mortgage register entries
- Litigation and disputes: pending court, arbitration and administrative proceedings, enforcement proceedings, tax inspections
- Regulatory compliance: permits, licences, concessions, and sector-specific requirements
- Personal data (GDPR): data processing agreements, privacy policies, register of processing activities, data breach history
How the audit is conducted
We begin with a kick-off meeting to agree on the scope and timeline. The company provides documents in a virtual data room or in paper form. We review the materials, ask follow-up questions, and prepare a written report containing:
- A summary of identified risks, ranked by severity
- A description of each finding with references to specific documents
- Recommendations on how to address or mitigate each risk
- A list of representations and warranties suggested for the transaction documents
An initial diagnostic meeting (1–3 hours) is available at a fixed fee. The scope and pricing of a full audit depend on the size of the company, the number of documents, and the complexity of the transaction. We provide a quote after an initial conversation.
Why KHM?
We combine legal audit expertise with hands-on experience in corporate law and transactions. We understand that time matters in deals, so we work efficiently and communicate clearly. Our reports are written to be useful to both lawyers and non-lawyers.
If you are planning a transaction or want to understand the legal position of your company, contact us. We will propose the right scope and get started quickly.