06/11/2013

Audit of documents

The audit of documents affected by the new legal regulation related to newly adopted Civil Code (The New Civil Code, NCC) No. 89/2012 Coll. and Act No. 90/2012 Coll. on commercial companies and cooperatives (The Business Corporations Act, BCA) is a service that will make implementation of new legal regulations in your company easier for you.

Are you a member of your company’s statutory body? Do you know that new rights and obligations will arise for you starting from January 1, 2014? Is your company ready for these changes? Are your commercial and other contracts and agreements ready for the new legal regulation? Do you know about possible advantages and disadvantages of the new legal regulation? Do you know that decisions will have to be taken with respect to the further fate of your company’s memorandum of association? Do you know the impacts that any discrepancies between the wording of your memorandum of association and the effective legislation, or erroneously concluded contractual relations may have on your company?

Do not worry. We are not worried either. Even the most recognized legal authorities often do not know the right answers. However, we know for sure that transformation of your documents and deeds so that they would comply with the new legal regulation will not be an easy process. It is advisable to manage any uneasy process in a manner that would generate as little damage and unexpected events as possible. You can prepare the whole process yourself or assign the task to your lawyers. But this is how everybody will proceed. And so the assignment may not be complex, it may not contain priorities and deadlines. You may want to change or extend your assignment later on.  You will have to believe that your lawyers and you yourself will know what is what in the assignment and that the adaptation of your documents will finally turn out well.  However, this is a risk and risks should be eliminated.

There is however the third opportunity that can be used as a point of departure – to implement an audit of documents before you give an assignment to your lawyers. Your lawyers will then obtain a comprehensive and understandable assignment in the form that will be comfortable for them and will help them to meet their main goal, i.e. to transform your documents and deeds that are affected by the new legal regulation into the form corresponding to new requirements, relatively easily.

What is the procedure for the audit of documents then? The main steps of such an audit are described herein under:

  • Introducing a selective overview of some legislative amendments in the form of a brief presentation to a client– the topic is so complex that you will really get just a taste of it.
  • Identifying the documents and deeds affected by the new legal regulation – we will look through your company entirely and look for documents and deeds that your company uses commonly (e.g. the memorandum of association, foundation deed, articles of association, collective agreement, terms of trade, contracts for work, service level agreements, etc.). We will draw up a list of these documents and deeds and identify priorities for their transformation. We will compile physical records of such documents and identify their valid version.  We will create an archive of such identified documents and deeds.
  • Summarizing a client’s requirements for amendments not caused by the new legal regulation – here, we will devote time with you to every identified document and determine whether it is advisable to execute any changes or amendments based on your needs, not the new legal regulation. We will write down such identified needs in the form of well-arranged summaries of tasks that will refer to a specific document, so called ToDoList will be created.
  • Preparing a project plan and the budget for harmonization of documents – this step will be meaningful in an environment where we will identify a large number of documents. A company with five employees will require a plan different from a plan for a company with thirty thousand employees. If there are any priorities, it will be advisable to take them into account in the project plan. In the case of complex projects, it will be appropriate to estimate necessary sources both on your side and the side of legal services suppliers.
  • Preparing a data storage medium containing any and all affected documents in an editable form and a complete assignment – this is the final product that you may hand over to your lawyers. It is one CD for small companies and regularly provided updated data storage medium for large corporations. This data storage medium contains a list of affected documents, the priorities of their transformation, the existing affected documents transferred to an editable form (source documents are not always available in an editable form).  Every affected document contains a ToDoList with requirements for any changes and amendments to documents that have not been necessitated by the new legal regulation but by your needs. Of course, the ToDoList may be empty or full of comments. A data storage medium also contains a project plan that reflects priorities for implementation of amendments and an estimated volume of work that will have to be done both by the contractor and the client.  The project plan will define milestones, responsibilities and deadlines. This basic data set may be used as an initial source for defining a demand for amendments to documents necessitated by the new legal regulation. The minimum assignment may comprise of two documents, the maximum tens maybe hundreds of documents.
  • Project management – another part of the audit of documents may also include securing cooperation between a client and a supplier of legal services and management of the whole project in the form of coordination of individual activities, checks of compliance with a time schedule and a budget, etc. that will be completely secured by our consultants for your company as a turnkey project. If you do not have a suitable partner available for supply of legal services we will arrange for services provided by a qualified lawyer under the project.

Leave the selection of the right way and the form of execution up to us. Determine just your objectives and the essential content of your contractual relations. We will prepare an assignment that will be practicable in the time that you will define. Dedicate yourself fully to activities that bring profit to your company. Commission us to carry out the audit of documents for you!