Presentation on theme: "Definitions “ Legal” is defined as based on or concerned with the law. “Audit” is defined as a complete and careful examination of the financial & legal."— Presentation transcript:
Definitions “ Legal” is defined as based on or concerned with the law. “Audit” is defined as a complete and careful examination of the financial & legal records of a business or person or entity
What is a Legal Audit? Legal auditing is usually a litigation management practice and risk management tool, used by insurance and consumers of legal services (you and your business, for example), to determine if errors, abuses, and inefficiencies exist by carefully examining and identifying legal issues and risks. Includes a thorough legal examination of all of the books and records of a Business from a legal perspective.
Bottom line>>>A Legal Audit is like a thorough checkup to review your organization's legal health and diagnose any problems that need attention. NOTE: A legal audit is virtually worthless unless you ask the “hard questions”.
Legal Audit Compliance Checklist- A legal audit should address at least all the following areas (if applicable): Form of Organization Corporations and Governance Federal Tax Law Compliance Other Federal Regulatory Compliance State and Local Tax Fundraising and Access to Capital Website and Internet Billing Practices Intellectual Property Document Retention Policies Communications Human Resources and Employee Benefits Leases Contracts Financials Lawsuits Legal Barriers
And Don’t Forget: Licensing CLE Workers Compensation Shareholder Agreements Operating Agreements Succession Management and Planning Issues. Affordable Health Care COBRA FMLA Etc. etc. etc.
WHAT ABOUT ME? PERSONALLY? Estate Planning Wills and Trusts Eldercare Educational Funding Adequate Insurance Buy-Sell Agreements for Corporate shareholders and Members of LLC’s Health Insurance Compliance Qualified Plans Non-Qualified Plans Workers Compensation Tax Planning Etc. Etc. Etc.
Benefits of a Legal Audit A successful audit will generate solutions that improve your business, in addition to searching for non- compliance. The audit will generate best practices recommendations which will allow you to seize opportunity and to prevent liability and costly legal fees for litigation.
Liabilities Legal Audits Help to Prevent Personal liability of owners via “piercing of the corporate veil” due to noncompliance Disputes and litigation between owners Employee lawsuits against employer Unauthorized acts by directors, managers, officers and owners A legal audit of the business by regulatory or governmental agencies, and the resulting compliance.
Major Benefit: Cost of doing it right is usually a fraction of the costs of doing it wrong, incurring litigation costs and/or trying to fix serious legal deficiencies, omissions and errors “on the fly.”
OTHER BENEFITS OF LEGAL AUDITS Maximize tax benefits Minimize taxes and penalties Minimize state and municipal tax and statutory and regulatory fees and penalties Increase the value of the business at time of sale of assets or interests Avoid litigation!!!!
When Should A Legal Audit Be Performed? If you haven’t done one>>>>NOW!! At least annually, in the future. Suggestion>>>>Right around tax time when all your records are easily accessible.
Who should perform a legal audit? Your attorney, in conjunction with your accountant. If you attorney is not familiar with business, tax and other business issues, and many are not, find another attorney. Ask Edward J. Gudeman of Gudeman & Associates, P.C.
ANY QUESTIONS? Presented by Edward J. Gudeman Gudeman & Associates P.C W. Eleven Mile Rd. Royal Oak, MI