The Younger Law Blog

Small Business Legal Audit Checklist


1. Contracts

yes no Are all of the company's important agreements in writing? yes no Are there good form contracts in place? yes no Do the contracts provide for disputes to be resolved in courts in the city where the company's principal office is located? yes no Is there an attorney's fees clause in each contract? yes no Does the contract say that amendments to the contract may only be made in writing? yes no Are there provisions in the company's standard form contracts regarding limiting the company's liability? yes no Is the company complying with the terms of its contracts and leases?

2. Corporate Minute Book

yes no Do the Articles of Incorporation provide for sufficient authorized number of shares? yes no Is a copy of the Articles in the Minute Book? yes no Is a copy of the Bylaws in the Minute Book? yes no Are there minutes for all meetings of shareholders? yes no Are there minutes for all meetings of directors? yes no Are there minutes of annual shareholder meetings? yes no Are all written consents of shareholders and directors included?

3. Stock Matters

yes no Has the company received the consideration for each sale of stock? yes no Is the Stock Ledger current? yes no Were all sales of stock made in compliance with applicable securities laws? yes no Did the Board of Directors properly authorize the sale of all stock? yes no If necessary, did the shareholders properly authorize the sale of stock? yes no Did the company receive the consideration for the issued stock? yes no Were stock certificates issued? yes no Did the stock certificates have appropriate legends?

4. Government Filings

yes no Has the company obtained its Federal Employer ID number? yes no Has the company obtained its State Employer ID number? yes no Have any required local and state licenses and permits been obtained? yes no Has the company qualified to do business in all states it is required to? yes no Have all annual information statements been filed with the Secretary of State? (varies from state to state)

5. Intellectual Property Protection

yes no Have trademark registrations been obtained for company products and services? yes no Is the "TM" or "SM" or "�" notice displayed properly on all company literature? yes no Have patents been applied for company-owned inventions and discoveries? yes no Is a trade secret protection program appropriate? yes no Have employees signed appropriate Confidentiality and Invention Assignment Agreement? yes no Have consultants and independent contractors signed appropriate Confidentiality and Invention Assignment Agreements? yes no Is the company infringing the intellectual property rights of others? yes no Is there a program in place to determine if others are violating the company's intellectual property rights? yes no Are all needed licenses obtained? yes no Is the company complying with all license agreements to which it is a licensee?

6. Employment

yes no Does the Company have an "at will" employment policy in place? yes no Do interviewers of prospective employees know what they can and can't ask? yes no Is there a Non-Discrimination Policy in place? yes no Is each prospective employee required to fill out a good form of Employment Application? yes no Are employees treated fairly and evenly? yes no Is there a Sexual Harassment Policy in place? yes no Are job offer letters to new employees carefully drafted? yes no Does the company have all needed forms from employees (W-2, I-9, etc.)?

7. Recordkeeping

yes no Is the company keeping good records of its income and expenses? yes no Is the company keeping track of all of its contracts? yes no Is the company keeping track of all employee records? yes no Is the company keeping track of all tax filings required?

8. Laws. Has the company determined the applicability of the following laws to its business? yes no Environmental laws yes no Worker Safety laws yes no Securities laws yes no Consumer protection laws yes no Advertising laws yes no Employment laws yes no ERISA yes no Product liability laws yes no Corporate laws yes no Tax laws yes no Commercial and Real Property laws