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Legal Audit

We at Advocate Rajeev Surana & Associates aims to assist in profitable, efficient and optimum growth of the Company’s operations, objectives, and achievements of its Corporate goals within the ambit of the laws of the Company as well as the laws of the land. We are established to address and reliably deliver a sense of legal safety encompassing within itself procedures and processes which keeps any business or government/non- government organization informed and empowered in its functioning with minimum risks of exposure to any trouble from violations or from weakness within organizations structure of performance. We aims at providing solution that examines a company’s structure, contracts, policies and practices in the light of existing laws, jurisprudence, business experience.
Legal Audit by provides the legal muscle to any operations aims at building overall growth and success of any economy, because the quality of the economic structure depends upon the foundation and grass roots strengths of operations.
We aim to minimize the legal risks through the examination of their daily operational risks and a detailed study of the company’s legal history and by conducting a legal audit a business or organization will be able to locate and systematically remove or diminish its legal liabilities thereby contributing in an effective and unique way to the overall growth of corporate as well as society as a whole.
The vision of our legal audit division is to endeavor to provide legal health and safe environment for any operations to achieve success with velocity, peace of mind and structured competence.

Legal Audit - Building on a strong base

A solution that examines a company’s structure, contracts, policies and practices in the light of existing laws, jurisprudence, business experience and twenty years practical legal experience, Legal Audit provides managers with an assessment report identifying the legal risks the existent situation poses for the company along with recommendations. This audit is a vital component to any business in today’s markets. It offers a clear and definitive insight into the operations of a business and the pitfalls it faces on a daily basis. By conducting a legal audit a business will be able to locate and systematically remove or diminish its legal liabilities. We conduct a detailed examination of any and all contracts that the company is a party to ranging from purchase and sale agreements to employment and managerial contracts. After our close and detailed examination of these documents we then proceed to offer the best solutions to these otherwise unobvious predicaments. We aim to minimize the legal risks through the examination of their daily operational risks and a detailed study of the company’s legal history. After our initial report we then go on to repair the problems and provide the client with a new position of less liability and an increase in their projected profits.
The worst settlement is sometimes better than the best judgement.
Occasionally, regardless of how hard it may try to avoid it, a company finds itself involved in a lawsuit either as a plaintiff, a defendant or a third party. When this occurs, dealing with such a situation in an objective manner sometimes becomes difficult with business sense being blinded by antagonistic personalities, emotions and short-term objectives that may be as basic as showing up the other party. Litigation Risk Management addresses this by taking an objective approach to the debate and establishing objective criteria to help a company choose its best course of action.
The objective criteria are based on variables taken into account because of the incidence that they have on the final outcome of litigation. The first criterion consists in examining evidence, law and jurisprudence to determine the strengths and weaknesses of each party’s case. This will give an indication of the opportunity for a successful outcome in the legal perspective.
The next criterion consists in examining the direct and incidental costs attributable to the litigation. This can include items like legal fees as well as time and resources allotted to the matter by employees. This will give an indication of the resources that are monopolized by the litigation.

Legal Audit Process

A Legal Audit is comprised of 6 steps:
1. The first step of a Legal Audit calls for a company-delegated representative to answer a questionnaire that provides general information allowing the auditors to customize the audit to the specific needs of the company saving time and energy. Hence, the audit needs of a construction company being different from those of a software consultant, the audit will not be carried out in the same manner.
2. The second step of a Legal Audit involves collecting all the necessary documents and materials for the conduct of the Legal Audit. The required documents can generally be broken down into 5 categories but more are possible depending on the field of business and the complexity of the corporate structure:
(I) Corporate issues: (comprising examinations of company charters, by-laws, registries for administrators and stockholders, stocks and bonds, minutes and regulatory body obligations like business registrations, permits and licenses)
(II) Contractual issues: (comprising examinations of all Distributor, Employment, Partnership, Facility and Equipment Leasing, Purchasing, Licensing, Warranty and Sales and Order agreements)
(III) Labor issues: (comprising examinations of all documents relating to employment offers, applications, agreements, training, terminations, disciplinary measures)
(IV) Tax issues: (comprising all documents relating to loan and debt, asset structures)
(V) Governance issues: (comprising all internal manuals and procedures that dictate the functioning of the company on a day-to-day basis)
(VI) Publicity issues: (comprising all marketing, sales aids, press releases, product literature, promotions and promotional activities, web site content, copyrights, trademarks)
3. The third step of a Legal Audit involves meeting select members of management and employees to understand the actual functioning of the company and note concerns each may like to draw attention to. This will be useful in the fifth step.
4. The fourth step of a Legal Audit involves reviewing all the documents and materials enumerated in the first step, making sure they are in conformity with local laws, regulations, practices and that they adequately serve the needs of the company whilst protecting it. In this step, any anomalies are highlighted and suggestions to correct them or irregularities (so as not to say illegalities) are noted.
5. The fifth step of a Legal Audit involves submitting a report that highlights the findings of the Legal Audit. This report might propose solutions to cure certain deficiencies; it might also issue warnings if deficiencies pose legal threats. The report will also take into account variations between what is done on paper and what is the common practice in the business. It will also assess the legal risks posed by discrepancies raised and propose solutions or strategies based on the analysis of the risks assessed.
6. The sixth step of a Legal Audit, should a company decide to follow through, involves implementing the proposed solutions to ensure the companys structure, functioning, marketing, agreements and promotional programs comply with the laws of its industry and ensure a well-protected business.

What is Legal Audit?

The word ‘Legal Audit’ comprises two significant words, i.e. LEGAL + AUDIT. Therefore, our Team believes that both these bifurcated words of Legal Audit have necessarily to be defined separately for the sake of convenience and awareness of the Corporates, Individuals, Private Sectors and to all those who have to know the importance, intent and significance of the words ‘Legal Audit’ for their welfare and well being, to minimize the present and future litigations.
We do believe that the Legal Field is just similar to the applied Science, like the Science the words Legal Audit covers under its definition, consisting of Concepts and things of facts and on the basis of their implementation is produced a new product / new concept. In the same manner, Legal Audit consists of Legal Field – i.e. laws related to each and every Act prevailing in our country and abroad + the Audit Field related to audit, accounting and commercial nature of transactions in the industrial and other commercial areas.
Now, the Legal Audit deserves an innovative research and is of paramount necessity for the overall growth and success of the economy, because the quality of the economic structure depends upon the Foundation and grass roots level, besides other correlated aspects directly related to the economy, irrespective whether it is public or private sector.

Legal Audit

To sum up the LEGAL AUDIT is imperative in these days when one is living and operating in the midst of complex, confounding intricate laws prevailing in our land with all its diverse interpretations of laws and indubitably, LEGAL AUDIT will be a boon and blessing to all individuals, Firms, Societies, Banks, Borrowers, Guarantors, Corporate in short to anyone and everyone in this world. Moreover, the advantages of LEGAL AUDIT enumerated above is only illustrative and not exhaustive; hence only a trial with us is worth the deal and will surely convince you of the tremendous benefits you can reap by way of our Leg al Audit.

Why Legal Audit is Necessary?

“Prevention is better than cure.” Is it not? Preventive steps if not taken well in advance for curing one’s serious disease may not only result in exorbitant costs for medical treatment but also snatch away one’s dearest and most precious human life in the advance stage of the serious ailments.
Similarly, Legal Audit can be compared to preventive laws initiated with abundant and discreet prudence and caution to dispense with any litigations arising in future, and consequently may culminate in burning one’s fingers, like getting sued, fined or prosecuted or penalty imposed in avoidable litigations due to deficiencies / lacunae existing in the written documents / agreements / undertakings / statutes / bye laws executed by the individuals, partnerships, Companies, Corporate Undertakings, Banks and Governmental Undertakings and so on, in transgress of the laws and regulations of the Organization / Company / Governmental Enterprises, for example deviation from the laid down Memorandum and Articles of Association of the Private Limited Company and or the laws of the lands, based on various enactments and acts in force.

What are the implications/Significance of legal audit vis-a-vis other audits like tax audit, Financial audit Company audit etc?

The distinctive and distinguishing difference between Legal Audit and other Audits like Tax Audit, Financial Audit, Company Audit etc. are that all these Audits other than Legal Audit are invariably conducted after the completion / closure of the financial years for which period the audit is to be undertaken; i.e. it is post audit – whereas the Legal Audit commences right from the Day One of the commencement of the Project on hand or from the very inception of the Project in the offing to be implemented., so to say it is pre-audit.
THE SIGNIFICANCE AND IMPLICATION of Legal Audit is to identify the potential, present and prospective legal problems by the legal audit team, even in the initial stages of the commencement of the Project / Undertaking / Joint Business ventures, Collaboration arrangements, agreements signed mutually between the parties interse –which is entrusted with the Legal Audit of the Company or Corporate Company as the case may be, for an introspection and thorough review / re-casting the Company’s plans, operations and strategies to reduce if not to eliminate the potential and vulnerable legal risks / dangers the Company is prone to, with comprehensive coverage of the entire procedures, rules, regulations, and covenants, undertakings, agreements signed with proposed and existing buyers / creditors suppliers etc. including the staff employed in the Company Each and every paper right from the licenses / permits issued to the Company including the protracted correspondence exchanged pertaining to pending legal actions / litigations will be screened and analyzed and the legal lacunae will be diagnosed to find out effective key solutions viable and feasible to safeguard the individuals / companies / undertakings from incurring financial losses / paying penalties / fines etc. within the four corners of law.

How and the manner in which the legal audit is carried out?

The Legal Audit Team comprises talented and proficient experts with specialization in the different branches of law familiar with the various Acts of the land – and interacts interface and engages in discussions / consultations with the Company’s top Management Team and after studying the documents / papers readily made available to them for initial scrutiny find out the Company’s Corporate goals, mission and objectives in the different parameters of operational activities and the projected growth of the Company in the right perspective for successful implementation of its goals / objectives in accordance with the internal Rules and Regulations of the Company itself – as well as in strict adherence to the laws of the land based on enactments and acts in force.
The Legal Audit is thus an ongoing exercise to be performed at periodical intervals with special relevance to the prevailing tax laws, labour laws, statutory liabilities, Governmental levies / duties, commitments undertaken by the Company as per the Government Contracts, Franchisee Compliance and so on.

Importance and indispensibility of legal audit

In these days when plethora of litigations are going on endlessly before different various Courts / Tribunals / and other Consumer Redressal Forums, LEGAL AUDIT is a must for Individuals, Partnership Firms, Companies, Corporates, Banks / other Financial Corporations, Borrowers / Guarantors etc. if at all they are interested to minimize the legal risk / reduce exorbitant legal expenses likely to ensue on account of pending litigations in Courts, just because of the deficiencies / lacunae / anomalies in the written papers / documentations / agreements / bye laws / covenants executed by them. Not only they can save sizeable legal expenses but also get rid of the tensions, anxieties and apprehensions / worries likely to be faced by them in the event of ceaseless litigations – which the Legal Audit will help to eliminate if not at least to reduce the same.
For instance, in the case of Human Resources Legal Audit, Legal Audit provides a unique opportunity in all its transparency to find out whether the human resources – organization and its professionals are capable and are having the adequate resources to support the organization’s stipulated strategies in the proper perspective and also in understanding whether the professionals entrusted with the management of human resources are really discharging their duties and responsibilities within the ambit of policies and programmes laid down in the procedures / modus operandi of the Human Resources Company, for promoting optimum development in Human Resources in national interest.
In fact, the check list / formal agenda of Legal Audit covers comprehensively the entire documentation / operational arenas / financing policies, mission / objectives / assets / liabilities / patents / trade marks / copy rights owned by the Company including press release by the Company – on which depends the culmination of successful implementation of the Companies’ policies, programmes and objectives within the purview of the laws of the land.

The salutary effects/manifold benefits of legal audit

Legal Audit ensures profitable, efficient and optimum growth of the Company’s operations, objectives, and achievements of its Corporate goals within the ambit of the laws of the Company as well as the laws of the land.
To minimize the legal risks / legal expenses on account of avoidable and unnecessary litigations and be free from penalties / fines imposed by Government / Courts for non compliance of the laid down laws / Rules, in force.
Helps to remove the disability clauses / flaws in written agreements / undertakings / covenants; bye laws and to avoid payment of damages, claim compensation and other risk factors with perfection and accuracy in the documentation legally and otherwise as well.
Enable one to update the registration, records and licenses in conformity with the laws of the land.
Suggest ways to reduce the tax liabilities / financial commitments to the creditors / Government with improved approach and meticulous care in its operations.
Helps to recover dues from borrowers / customers by proper drafting of agreements with them, without the necessity to go to Courts to realize the dues.
To offer key solutions for potential employee problems like unfair labour practices, workers’ claim compensation cases, disputes in wages and salaries and fixation in salaries, overtime payments and so on.
To afford ample opportunities for reviewing and overhauling the Trusts, Wills and superannuation plans and to avoid payment of huge claims / compensation / to safeguard one’s interest in the event of death, divorce, cancellation of partnerships, dissolution / winding-up of the Company.