How do you carry out a company check? And why should you carry out a company check? Here are three simple steps you can take before doing business with an unknown firm.
If you have doubts about the authenticity of a company, it pays to check that they are legitimate before you work with them.
Fraud is an ever-growing risk that is costly and damaging. Before working with a new company, firms and their boards should perform due diligence. These simple steps will help you determine whether you can trust a company or should avoid it at all costs.
1: Check out the company’s website
A straightforward way to check out the authenticity of a company is to do a quick online search and see how legitimate their website looks. If they don’t have one, this should ring the alarm bells. You can tell whether a company is authentic by certain things on their website. If you see poor grammar or spelling, consider it a red flag.
Find out if the business has a landline and an address. Call the company and search google maps to confirm it is an office and not a fake address.
2: Look for a company number
Check official sources like Companies House in the UK or your local registration office. Companies House, for example, can provide you with information on the registered office address, the company status, and the company type. You can also see things such as a company’s incorporation date or its previous name.
Additionally, you can view the individual director’s profile to see all their prior appointments. It is vital to check out the directors and other individuals with significant control.
3: Run a credit check
When in doubt about the solvency of a business or you want to know if they have the funds to pay your fees, you might want to run a credit check.
A company credit report can show you:
- Company verification – the company name, address, number, and shareholder information are registered.
- Director details – company credit reports will give you director and shareholder details; you can then view individual director reports.
- The company’s credit score – the higher the credit score, the more stable the company.
- The company’s group structure. This will enable you to verify the company you are thinking of dealing with and any companies within its group structure.
You can check the legitimacy of a company in many ways, but if something doesn’t feel right, you should always trust your instincts. Don’t do business with a company if you don’t feel comfortable doing so. The more vigilant a business and its directors are, the better they will protect themselves from fraud.