Havering Solicitors

Havering Business and Legal Audits

What are the benefits of a legal audit?

A legal audit is used to pinpoint legal areas of concern and risk in your business, reduce costs and improve overall efficiency. Based on the results of an audit, you can formulate a strategy to implement changes according to risks that have been highlighted and generally improve the legal processes your business uses.  In tough economic times, cost-cutting is king and significantly reducing the risk of litigation and legal disputes will allow you to save on legal costs, time and lost productivity.  As the law is an ever-changing beast, by conducting legal audits you can keep up to speed with changes.

How often should I conduct an audit?

The answer is not set in stone, but it is advisable to conduct one at least every six months so you are up to speed with internal and external changes.  If the potential cost savings of conducting an audit more regularly outweigh the time and effort involved in conducting the audit, then it obviously makes sense to conduct more frequently.  Naturally, the time will depend on the size of the business, resources and the nature of the industry, with some industries being much more regulated than others.

What things should I check when conducting a company law audit?

The purpose of a company law audit is check your statutory company law registers are properly filed with Companies House and up to date.  Statutory registers include the

Register of Directors and company Secretary, Register of Members, Register of Directors Interests, Resolutions, Board minutes, shareholders meeting minutes, Annual Returns and Accounting reference date.  You should also have a look at the Directors service contracts, the company’s articles of association and memorandum and shareholder agreements.

What things should I check when conducting a contractual audit?

The purpose of a contractual audit is to review the contracts your organisation is currently engaged in, ensure compliance with the terms and conditions and examine whether there is scope to renegotiate any contracts given the current economic and legal environment.  You should review the terms and conditions of trading you use with customers and suppliers (and make sure they available prior to purchase).  You should also review agency, franchise and distributions and any leases and licenses you have on properties you occupy.

What things should I consider when conducting a Data Protection audit?

Data should be properly held, stored and used according to the provisions of the Data Protection Act 1998.  You should also check whether your company needs to register under the Act and examine whether your employees are aware of their obligations.

What things should I consider when conducting an employment audit?

You should review your employment contracts and make sure that provisions regarding wages, wage review periods, commission and bonus, disciplinary and grievance procedures, sickness leave and pay, holidays, maternity and paternity leave and pay, confidentiality, notice requirements, benefits (pensions rights health care), overtime requirements and place of place of work are included.  You should also review whether you are in compliance with legislation, such as the Equality Act 2010 and Disability Discrimination Act.

Please return either to the main business audit page or to the business law main page.