Initial Legal Health Check for Companies

What to keep in mind

The exercise is more than collecting documents. Its purpose is to connect available information with the company's actual legal obligations and identify inconsistencies affecting its ability to operate, contract or make decisions.

At the corporate level, counsel reviews registration details, current constituent documents, amendments, governing bodies, powers of attorney and minutes. Decisions adopted but not properly recorded, as well as pending filings, should be identified. Requirements vary by company type and jurisdiction.

For contracts, it is important to identify agreements essential to the business: key customers and suppliers, financing, guarantees, leases, distribution agreements, licenses and related-party dealings. An initial diagnostic does not necessarily require reviewing every clause of every agreement. The objective is to identify those most likely to cause significant problems on expiration, breach or change of control.

The review may also include an initial assessment of disputes and potential liabilities. Demands, litigation, administrative notices and obligations assumed by officers should be considered alongside their deadlines and supporting documents. Complex labor, tax or regulatory issues may call for specialists.

The findings should become an action plan. Urgent measures, necessary regularization, preventive improvements and matters that can wait should be distinguished. This allows resources to be directed first to substantial exposures.

A valuable result is an inventory of records and responsible persons: where minutes are stored, who holds contracts and which attorneys-in-fact still act. This supports future management and reduces reliance on informal knowledge.

Distinctions often confused

Frequently asked questions