Legal Opinion Letter for an Investment Company

What is Legal Opinion?

Legal Opinion is a tool that allows parties to obtain a qualified third-party opinion on the subject, object and other issues related to the conclusion of a transaction. It is a document drawn up by a competent lawyer on any specific question or problem.

Before entering into any commercial transaction, the parties to such transaction must carefully consider the nature and volume of the transaction, as well as legal issues related to it.

Why do we need Legal Opinion for investment activities?

Regulators in many countries require the provision of a legal opinion for capital markets when applying for licenses of professional securities market participants, such as investment funds, forex brokers, depositories, and others.

The legal opinion for an investment company contains information on whether the compiler considers that the company applying for a license is capable of carrying out the activities it declared when submitting the application, which is based on the documentation submitted to the regulator by the applicant company.

Lawyers preparing legal opinion for investment activities not only investigate business plans, financial models, constituent documents, agreements with users, agreements on personal data protection, AML policies and other documents, but can also communicate with shareholders or directors applying for company license.

The regulator may require such legal conclusions from the investment company in the near future.

What should be considered when drawing up a legal opinion for an investment company?

The legal opinion should be prepared by a specialist with experience in investment law and not by the law of that foreign state, where the lawyer may not be familiar with the compiler.

Quality prepared legal opinion on investment issues are distinguished by strict language, clarity of circumstances provided, validity in accordance with current legislation, and presence of transparent and understandable conclusions.

It is important to know that if the customer's activity being investigated is considered illegal, the conclusion cannot be positive. It should be noted that no self-respecting law firm will risk its name and give an opinion on the legality of the activity, if the activity being investigated is illegal.

It important to remember that in drawing up a legal opinion on any issue, lawyers are responsible for their opinions, as they conduct legal and factual research, analysis and verification.

It is for this reason that providing a legal opinion can be a rather expensive process.

Legal Opinion Compilation Form

The law does not establish any specific form that a lawyer must adhere to when drawing up a legal opinion, including a legal opinion on the possibility of challenging the registration of a TM. However, legal opinion has a certain form developed over centuries, that is the practice of drawing up legal opinions by lawyers from numerous countries around the globe.

Usually, the structure of the legal opinion is the following:

Information about the customer, information about the person to whom the opinion is addressed, information about the compiler, information about the task that is delivered to the compiler. In some cases, it is also assumed that the legal opinion will be used by persons other than those specified. As an example, a legal opinion addressed to the underwriter regarding the legality of the proposed issue of shares or bonds, upon which the issuer's transfer agent (transfer agent) or issuer’s bank must also rely.
General presentation of the documents under study, other factual or legal issues that were considered by the compiler in the presentation of Legal Opinion, as well as information on the various admitted reservations. Such reservations may vary depending on the nature of the request. For example, there is an opportunity to make a statement about the advisability of using a foreign law, in the event that the obligation must be fulfilled outside the country. This is especially true in cases where issues of more than one country are being raised, which requires the involvement of relevant lawyers, attorneys or foreign partners.
The legal opinion of a lawyer, including the study of facts, interpretation of the facts on the subject of their legality or potential risks. The compiler of Legal Opinion should clearly and in details examine a sufficient number of facts confirming each of the conclusions set forth in the legal opinion.
The conclusion of compiler based on the study. In most cases, the findings of Legal Opinion can be backed up by copies of the documents examined, with which the legal compiler issued an opinion.
The date and signature of the author, who issued the legal opinion. Usually, legal opinions are signed on behalf of the company with the specifications of the person who made the report. It should be noted that even such a seemingly insignificant moment as the date of the approval of the legal opinion is extremely important, since the legal opinion must show the status of legal norms and the practice of their application at the time of preparing the opinion. Legislation including corporate, banking and tax is subject to change, and with this, conclusion set forth in the legal opinion may change.

It is necessary to take into account that a legal opinion should not be considered as a substitute for legal support, and the client should understand that having received a legal opinion, it does not mean a “guide to action” or a deal on its own.

Lawyers of Law and Trust provide services for the development of a legal position on issues raised by you and further development of legal opinion.

Key benefits of legal services offered by Law and Trust International

Experience and qualifications. The experience of the L&T International team is more than 15 years. It gives the opportunity for working with cases in many business areas like finance, IT, agriculture, trade and foreign economic activity. Thanks to this experience, our specialists always offer the best selection of services.
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