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Comprehensive legal audit (due diligence): assistance to businesses in Russia
Structure of legal due diligence
Preparatory stage
Definition of goals and objectives of the audit - the depth of the audit in time and by circle of persons is determined, as well as a list of risks that need to be minimized
Conclusion of an audit contract
After determining the goals and objectives of the audit, an agreement is concluded with a list of responsibilities and deadlines for conducting an audit and preparing a report
Collection of information and documentation
A request for the necessary documents is sent based on the goals and objectives of the audit. If it is possible to check a number of pieces of information against open and closed registers, reconciliation with data from registers is also carried out
Analysis of the collected data and assessment of the identified risks
The data obtained is analyzed, the problems that may arise in the event of a transaction and the likelihood of their occurrence are described, and the documents that can be provided by the seller
Reporting and provision of recommendations
A general report is drawn up in writing, describing the goals and stages of the audit, the list of requested and provided documents, risks, and ways to minimize them
Final inspection and assessment of corrected violations
Optionally, in some cases, if additional documents and information are provided, the report may be corrected
Concept and types of legal due diligence
As part of a comprehensive due diligence, the basis of which is a financial and tax audit, a number of tasks are solved related to the need to minimize risks and obtain reliable information to make the right management decision. For example, an investment fund that manages a package of private or corporate investments intends to acquire a metallurgical plant. In this case, in order to decide whether it is worth making the specified transaction, at what price it is bad, and at what price it is a good transaction, it is necessary to:
Determine and assess the volume of assets and property of the enterprise, calculate profitability taking into account depreciation, possible capital investments, and dynamics of changes in the volume and structure of demand
Check the availability of the company's obligations, agreements that ensure the sale of products: loan and pledge agreements, contracts with warranty service, dealer agreements, and partnership agreements
Establish the list and value of existing intangible assets, including intellectual property objects, such as trademarks, industrial property objects (inventions, utility models, industrial designs), know-how
One of the stages of a comprehensive audit is Legal Due Diligence—a procedure for checking the counterparty or the subject of the transaction (object) before it is made using legal instruments
Based on this definition, the procedure can be conditionally divided into two types (depending on the subject of the audit):
Based on this definition, the procedure can be conditionally divided into two types (depending on the subject of the audit):
- -1-Verification of the company before the transactionAs part of such a check, the subject of the transaction may be the company itself (for example, in the case of a legal audit for mergers and acquisitions—M&A): in this case, the company's assets, its reliability, and legal risks associated with management and operations are thoroughly checked. The subject of the transaction may also be the obligations that should be fulfilled by such a company (supply of goods, performance of work, etc.): in this case, the company is checked more superficially (express check) for the main risks (the risk of loss of tax benefits or recognition as a "transit company", which may lead to additional tax charges for the client; the risk of bankruptcy and, accordingly, challenging transactions; the risk of non-fulfillment of obligations; the risks of violation of intellectual property rights; etc.)
- -2-Verification of the object of the transaction before its executionAs part of this audit, emphasis is placed on checking the subject of the transaction. If, for example, the subject of the transaction is the purchase and sale of a land plot, then as part of the provision of services, the history of the specified object, documents securing the formation of the land plot, its legal status (including types of permitted use), the presence/absence of legal and actual encumbrances (pledge, rights of servitude, restrictions on use), assessment of the possibility of its withdrawal for state needs, and the possibility of placing infrastructure on it are checked (supply of gas, water, electricity, roads, etc.)
Legal audit can be both comprehensive / "complete" (covering all issues regardless of the branch of law) and partial. The latter, depending on the key questions (risks) to which certain verification activities are aimed at, the so-called "key issue audit", may include checking the following:
- Intellectual property
- Contractual framework of the company
- Internal documentation of the company
- Real estate and capital construction projects
Goals and objectives of legal audit (with examples)
The goals of a legal audit coincide with the tasks of an audit in general—to obtain an objective picture and to get the opportunity to make an optimal management decision. The difference is a more limited toolkit and empirical base of the study. When conducting this type of audit, financial or accounting statements are not checked; only legal documents are taken into account during the analysis
Objectives of legal audit (with examples of risks to be eliminated by the relevant tasks):
Assessment of legal risks and problems of the company (for example, an amusement park for children does not have safety documents and does not carry out timely repairs and updates of attractions)
Verification of compliance with legislation and legal norms in current activities (for example, a clinic provides services in "cosmetology" and does not have the appropriate license)
Preparation for transactions: identification of factors affecting the value of the asset (e.g., an investor acquires a warehouse without taking into account that the short-term lease is expiring soon and the lease rate may be significantly revised)
Assessment of the company's structure and ownership (for example, a group of companies is being acquired, while at the time of its creation there was no provision for minimizing tax risks, the division of the group was carried out not on an industry, but on a territorial basis; in the near future the risks of identifying a "business split" and additional taxes are high)
Analysis of rights and obligations under contracts and transactions (for example, a company has a number of guarantees to customers that will have to be fulfilled over the next five years)
Ensuring legal purity for investors and buyers (e.g., a company is being acquired, but no documents confirming the purchase and registration of the equipment have been submitted; there is a high risk of reclamation of the said property by a third party after the transaction)
Customer reviews
SberHealth
Afonin, Bozhor & Partners conducted a legal audit of the company's contractual framework in telemedicine. Today we use the services on a regular basis. High level of responsibility and expertise
CEO
We have been working for more than a year in all areas of activity: contractual work, corporate law, and tax issues. The company's lawyers confirmed the legitimacy of the scheme of our platform in court. One of the best offers on the market
Getblogger Platform
Anna Shkirina, Founder
Halsa | Personal vitamins
Afonin, Bozhor & Partners provide corporate support on an ongoing basis. We regularly use their services and emphasize the high level of their professionalism and competence
Artem Galikhaydarov, Director
Afonin, Bozhor & Partners provide us with a prompt solution to current legal issues, from the negotiation of contracts to the conduct of claim work. Good combination of price and quality of services rendered
OutDigital Agency
Roman Zaripov, Director
Happy Inc Platform
For the entire period of service, the team of Afonin, Bozhor & Partners has shown the ability to responsibly approach the tasks, provide services efficiently and on time, as well as a high level of competence of specialists
Alexey Klochkov, Director
KB-12 Agency
Usually, when we make a request to lawyers, we hear only a lot of restrictions in response. But the lawyers of this company are deeply immersed in the issue and always help to find solutions while remaining within the law and anticipating all the risks
Head of Customer Service
Documents and information required for legal audit (with examples)
As part of the verification activities aimed at identifying legal risks, the following documents are usually requested:
Constituent documents of the company and documents governing the management of the company (articles of association, minutes and resolutions of the general meeting, agreement of incorporation, corporate/quasi-corporate agreements and shareholders' agreements, as well as other similar documents)
Licenses, certificates, permits (if they are necessary for the performance of operating activities or are an essential condition of the transaction/necessary for its execution)
Documents of title to real estate and documents on the right to fixed assets (contracts for the supply of equipment, purchase and sale or lease of real estate, etc.)
Employment documents and local regulations (employment contracts, internal labor regulations, regulations on trade secrets/confidentiality, provisions on the results of intellectual activity)
Contractual framework (contracts with customers, suppliers, contractors, and other counterparties)
Tax documents (documents confirming the possibility of applying tax benefits and special regimes, as well as the preservation of the possibility of application in the future, for example, the status of a Skolkovo participant, the application of the simplified tax system or automated simplified taxation system, the application of IT benefits, and similar issues)
Information about litigation and claims (if the company is large, information is usually requested about litigation in the amount of more than 50 million rubles or about disputes that may affect the current activities of the company, for example, challenging a patent or revoking a license)
The amount of data requested for a legal audit and the thoroughness of the audit largely depend on the specific situation. For example, if a company is acquired, the main asset of which is the right to a long-term lease, then close attention should be paid to these documents, but if a design bureau or laboratory is acquired, then the main asset should be the personnel and patent portfolio of the company
Why choose us for a legal audit
- All-inclusive, that is, full verification at no additional cost
- We guarantee confidentiality and protection of commercial information (with an NDA signing)
- Highly qualified lawyers with experience in various industries
- We conduct audits in any region of Russia, including remote companies
- We completely free you from routine document checks
- We use modern analysis methods for maximum audit accuracy
- 90% of clients choose remote audit for convenience and savings
- We give guarantees for the quality of the recommendations and conclusions provided
- We help you optimize your costs by eliminating legal risks
- We check the compliance of all documents with legislation and industry standards
Specialist who checked the article:
General Director, Head of Digital Law Practice
lawyer recommended by Law-300 and Kommersant
Published on:
23.07.2025
23.07.2025
Selected types of legal audits (with examples)
Audit of contracts and obligations
As part of the verification activities, all contracts are divided into three types (including for the purpose of determining the criticality of their provisions for further evaluation):
Contracts under which the company receives income (income contracts). For example, for a transport company, profitable contracts will be contracts of transportation and freight forwarding, and for the management company of an office building - lease agreements
Contracts for the company's main assets. For example, for a consulting company, the main asset will be the customer base and partner network, key managers, and experts. At the same time, for a manufacturing company, the main asset will be production facilities
Contracts for which there are strategic risks and it is necessary to make payments, expense contracts. For example, the main asset of the company may be pledged or perhaps a quasi-corporate agreement with top managers was previously concluded with the allocation of "phantom stakes", which can significantly reduce real profits in the future
After receiving these contracts, they are analyzed and evaluated, risks are identified, and actions aimed at eliminating risks are taken (termination of some contracts, conclusion of additional agreements to change the terms, etc.). The risk-based approach plays a key role, as it allows one to walk between the Scylla of legalistic vision (check each contract of the company, spending a lot of time and resources) and the Charybdis of entrepreneurial risks (there is always entrepreneurial risk; it cannot be excluded; contracts can be checked formally according to a checklist)
Intellectual property audit
1] Checking the completeness and quality of the patent portfolio (e.g., whether the key developments are covered by valid patents or whether there are dependent patents that cannot be used without the consent of other rights holders)
2] Checking trademarks (e.g., whether the company's name and logo are legally protected as a trademark, whether there is enhanced protection through the registration of a series of trademarks, whether the trademarks cover all necessary activities)
3] Verification of the correctness of registration of rights to the official results of intellectual activity (for example, whether the employment contract or job description provides for the creation of the results of intellectual activity, whether official tasks and acts of their implementation are drawn up, notifications to authors about the creation of works for hire and objects of patent rights, whether there are orders for the commissioning and entering of intellectual property objects on the balance sheet, whether payments to authors are regulated, and whether they were actually made)
4] Verification of the existence of exclusive rights to copyright objects (for example, whether there is evidence of the creation of program code or design as part of the performance of employees' official duties)
5] Verification of license agreements and agreements on the alienation of exclusive rights with counterparties (for example, on what terms and for what period the license is granted, whether there is a right to issue sublicenses, and whether it is possible to extend or revoke the license)
6] Verification of the existence of an intellectual property management strategy (for example, a document on the basis of which protectable results of intellectual activity are identified, and a person is determined who makes decisions on the optimal method of legal protection and on the secrecy of certain decisions, that is, the introduction of a know-how regime)
2] Checking trademarks (e.g., whether the company's name and logo are legally protected as a trademark, whether there is enhanced protection through the registration of a series of trademarks, whether the trademarks cover all necessary activities)
3] Verification of the correctness of registration of rights to the official results of intellectual activity (for example, whether the employment contract or job description provides for the creation of the results of intellectual activity, whether official tasks and acts of their implementation are drawn up, notifications to authors about the creation of works for hire and objects of patent rights, whether there are orders for the commissioning and entering of intellectual property objects on the balance sheet, whether payments to authors are regulated, and whether they were actually made)
4] Verification of the existence of exclusive rights to copyright objects (for example, whether there is evidence of the creation of program code or design as part of the performance of employees' official duties)
5] Verification of license agreements and agreements on the alienation of exclusive rights with counterparties (for example, on what terms and for what period the license is granted, whether there is a right to issue sublicenses, and whether it is possible to extend or revoke the license)
6] Verification of the existence of an intellectual property management strategy (for example, a document on the basis of which protectable results of intellectual activity are identified, and a person is determined who makes decisions on the optimal method of legal protection and on the secrecy of certain decisions, that is, the introduction of a know-how regime)
Legal audit of labor relations and personnel policy
Review of employment contracts and employment-related documents (e.g., whether additional payments to authors of works for hire, compensations to employees using personal cars for itinerant work, or compensations to remote workers are taken into account in the salary structure (and whether this is indicated in the documents))
Audit of HR documentation: orders, regulations, internal labor regulations (for example, there are no dismissal agreements for employees or a log of issued employment record books)
Compliance with the requirements of labor legislation: registration and dismissal of employees (for example, there are unregistered industrial injuries or unresolved claims of employees for forced dismissal)
Analysis of the risks of labor disputes and compensation payments (for example, there are significant arrears for unused vacations of the staff or the terms of the collective agreement on the provision of additional guarantees are not complied with)
Audit of the corporate structure and management of the company
- Verification of constituent documents and corporate decisions (for example, an investor intends to enter the project on the terms of obtaining a majority stake, however, his/her ability to make management decisions is significantly limited: it is impossible to change the person holding the position of the sole executive body without the consent of the minority owners in accordance with the charter)
- Assessment of the ownership structure and shareholder rights (e.g., one group company is acquired, but the said company is actually a "cost center"; all production facilities and intellectual property are transferred to the parent company, the operating company cannot operate outside the existing corporate structure)
- Analysis of corporate agreements and minutes of meetings (for example, an investor acquires a stake in a company where the charter restricts the rights of a minority shareholder as much as possible; there is a quasi-corporate agreement that obliges other members to vote at the general meeting of members in a certain way)
- Assessment of corporate risks and conflicts of interest (for example, a founder's stake is acquired without taking into account the fact that the specified person did not previously pay for the stake at the time of establishment, the specified person "eased out" another co-founder, and a dispute is currently underway to challenge the transaction for the purchase and sale of a stake)
Legal audit of financial activities and tax aspects
1] Verification of tax documents and reports (for example, the correctness of the application of the simplified taxation system, compliance with the conditions and procedure for attracting the self-employed)
2] Analysis of tax risks and liabilities (for example, analysis of the possibility of merging several companies into a group of persons for the application of the General Taxation System and collection of taxes and fines, identification of the risks of additional charges for unjustified tax benefits or non-fulfillment of the tax agent's obligations to withhold personal income tax)
3] Compliance of the actual system of calculation and payment of taxes at the enterprise with legal norms and standards (for example, a company applies a reduced VAT rate without taking into account changes in the types of activities or changes in legislation, does not determine in the standard contracts who bears the risk of changing the tax rate)
4] Identification of tax claims and penalties (for example, a company that has existed for three years is acquired, in respect of which no tax audits have been conducted, no audit has been conducted, and there is no communication with the accountant, in this case, the new owner will bear all the risks associated with additional taxes and contributions for previous periods)
2] Analysis of tax risks and liabilities (for example, analysis of the possibility of merging several companies into a group of persons for the application of the General Taxation System and collection of taxes and fines, identification of the risks of additional charges for unjustified tax benefits or non-fulfillment of the tax agent's obligations to withhold personal income tax)
3] Compliance of the actual system of calculation and payment of taxes at the enterprise with legal norms and standards (for example, a company applies a reduced VAT rate without taking into account changes in the types of activities or changes in legislation, does not determine in the standard contracts who bears the risk of changing the tax rate)
4] Identification of tax claims and penalties (for example, a company that has existed for three years is acquired, in respect of which no tax audits have been conducted, no audit has been conducted, and there is no communication with the accountant, in this case, the new owner will bear all the risks associated with additional taxes and contributions for previous periods)
Audit of rights to real estate and company assets
Verification of title documents for real estate (for example, a land plot with an indefinite border is acquired or privatization of which is disputed)
Assessment of legal risks associated with the possession or lease of real estate (for example, it is planned to lease a land plot, but there are no documents confirming that the previous lessor has waived the preemptive right to lease)
Audit of real estate transactions (purchase, sale, lease)
Verification of the presence of encumbrances, pledges, or arrests on property (for example, a pledge of a land plot or a capital construction facility has been registered, and the pledge creditor has not provided consent to alienation)
Audit of litigation and claims
Verification of lawsuits and claims against the company. Identification of potential disputes and ways to resolve them (for example, search for litigation on the Commercial Case File Database and State Automated System Pravosudiye (Justice), as well as information about the claims filed)
Risk analysis in current and potential litigation. Assessment of the possible financial and legal consequences of litigation. Documents on the existing litigations should be checked from the standpoint of a risk-based approach. In some cases, even a non-property dispute can entail significant financial costs, for example, if the subject is a change in the type of permitted use of a land plot or the cancellation of rights to a trademark)
Overview of audit cases
Due diligence of Halsa startup before investing
Halsa (myhalsa.ru) – is the operator of a service that offers a subscriber-based model to purchase optimal sets of vitamins selected by an algorithm based on artificial intelligence, taking into account the needs of each consumer. The system makes changes every month depending on the progress and goals of the user and also takes into account the duration of intake and the compatibility of components. At the request of the investor, the company's specialists conducted a comprehensive legal audit of Halsa at the startup stage: the entire corporate component was checked (constituent documents and previous decisions of meetings, the terms of corporate agreements), obligations to counterparties and employees were analyzed, and recommendations were provided on the model of working with contractors and consumers in order to minimize risks, taking into account the legislation on dietary supplements
Audit of the LG website by the company's lawyers
At the request of the developer and administrator of online stores, the official website of LG Group in Russia - https://rushop.lg.com/page/about-store was checked (LG is the fourth largest South Korean financial and industrial group, a large manufacturer of household appliances and electronics). As part of the audit, the user agreement, personal data processing policy, rules for the exchange and return of goods, and other documents posted on the website were analyzed. The analysis was required, among other things, in connection with the dynamics of the development of Russian legislation and the client's current judicial practice in disputes with consumers
Due diligence of Careerspace before acquiring a stake
The careerspace.app service automatically collects vacancies from 300 sources, selects the best ones, forms personal selections of vacancies, determines the candidates' compliance with employers' criteria, sorts responses by relevance, and creates digital profiles of candidates. As part of the acquisition of a stake in a startup by a private investor, a legal due diligence procedure was carried out, and the following issues were analyzed: the legality of collecting data from third-party sources, the compliance of the website and the application with current legislation, and the transfer of assets to the target company. An analysis of the correctness of registration of intellectual property rights, the regime of information protection with limited access, the registration of relations with personnel and contractors, the distribution of votes and profits was also carried out
Comprehensive audit of Pechagin Product advertising materials
Pechagin Product specializes in the production of sauces and other food products under the Pechagin and Pechagin Professional trademarks on its own premises. The company's products are supplied to large supermarkets and restaurant chains. At the request of the client, the materials published in all channels were checked for compliance with the legislation on advertising; a procedure for labeling online advertising in connection with changes in legislation was prepared; a comprehensive legal opinion was provided, taking into account the delineation of the roles of advertisers and advertising distributors in the labeling of online advertising; and the legal and regulatory risks of the client were reduced
Legal research of the content and documents of Beorg service
An intelligent system based on beorg neural networks (https://beorg.ru/) allows one to recognize various objects, including passport images. Among the customers are Sportmaster, X5 Retail Group, LENTA, and other companies. The service administrator is a member of Skolkovo. The lawyers conducted a comprehensive legal study of the organization's existing personal data processing system and prepared a justification for the legality of the processing of such data, which later allowed the client to enter into contracts with large customers. The client was provided with information on potential legal risks and ways to reduce them with minimal organizational costs, as well as a possible scheme of work, taking into account the recommendations of lawyers
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OGRN 1187746441255
INN/KPP 7707413213/770901001
Personal data processing policy
Offer Agreement for the Provision of Legal Services
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