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Small Business Legal Audit Checklist

June 21, 2017

 

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

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