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Corporate entity health checks: what are they and how can they help you?

Why might you benefit from a corporate entity health check?

Running a compliant business begins with having full insight into your organisation’s legal entities and the correctness of their legal structures. So, question, do you? Or do you find it an ongoing challenge to maintain an overview of whether your entity is functioning correctly and all relevant information is present? If some entities were sold tomorrow would you be confident that all relevant information is present? And do you feel confident that all required filings have been done correctly?

Don’t worry, you are not alone. And the really good news is that beginning today, you can stop guessing and get answers, with a Corporate Entity Health Check by Legadex.

What is a corporate entity health check?

Over the last few years we have helped dozens of national and international companies to conduct a “health check” on their legal business entities.

This health check is a brief analysis of the documentation available for each entity. It ensures that all the most important legal information is present and correct and removes any concerns you may have about a business’s ownership, for example, the legality of share transfers.

These types of checks can be especially helpful if you are planning an IPO or to sell one or more businesses. At the same time, we also have clients who ask us to perform these checks as an extra safeguard – just to ensure they have all the information they need on file or in their legal entity management software.

What do we check for you?

The scope of a corporate entity health check is always defined with you, in line with the trigger for the health check. For example, a sale might require a more thorough health check to ensure that the data room contains all the information buyers will want to see.

In general, we check whether the following documentation and registrations are available:

  • Deed of incorporation
  • Latest Articles of Association
  • Share register
  • Background documents regarding all share issuance/transfers
  • Documentation regarding share pledges/shareholders agreements (if any)
  • Documentation regarding appointment of current board members
  • Latest financial statement (including adoption decisions and filing)
  • Registered information with relevant public body; and
  • Completeness of the information in your legal entity management system.

How does a health check work in practice?

To give you an idea of how this works, here is an example of a typical health check we would perform on Dutch-only entities within our “standard” scope.

The first step is usually to ask the client for extracts of the information the Dutch Chamber of Commerce holds on them, plus an overview of the fillings per entity. This helps us to quickly understand the current status and history of the entities we are dealing with. These documents form the basis for our check.

Next, we examine all the documents received from you to decide how relevant they are to the check. Those that are deemed relevant are then reviewed to see whether the corporate information in the corporate documents corresponds with the information stated in the extracts. During the check, we put all our findings into a clear overview so we can update you on the process and progress at any time. This is especially useful if the check involves a lot of entities. And crucially, should we find irregularities, we provide solutions that will enable you to solve them.

What does a health check cost?

The fee for the Legadex corporate entity health check starts at €550 per entity. This is based on our standard scope (as outlined above) and covering a period of no more than ten years. If you have a different scope in mind or other specific requests, no problem. Just get in touch with us and we’ll provide you with a tailored quotation.

More information?
For more information, please contact Peter Schepens or Hans-Martijn Roos:

Peter Schepens
T: +31 (0)20 820 8396
E: pschepens@legadex.com

Hans-Martijn Roos
T: +31 (0)20 820 8396
E: hmroos@legadex.com