This Is Why You Must Perform a Company Check

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When investors or financial institutions want to partner with a company for financial purposes, a company check is vital to get all the information needed. When incorporating a company in the UK, there is information a business owner ought to provide to Companies House which will be uploaded publicly for easy access and transparency.

All companies’ information can be accessed by the public through Companies House WebCheck which most of it is free. Company checks help business owners know a business’ financial health and legitimacy before entering a partnership with an entity.

In this article, we will highlight reasons why you should perform a company check, the legal requirements surrounding these checks, and steps on how to conduct company checks.

What is Companies House WebCheck?

Companies House WebCheck is used for researching companies’ information. The general public can obtain information about UK-registered companies by conducting a web search on Companies House.

Whether you want to check a company’s information before you enter a business, or to analyse your competitors, Companies House WebCheck will give you the ultimate results.

Why should you conduct a company check?

Ensure business legitimacy

A business should not be involved in shady or dubious activities, so they must conduct company checks via Companies House’s online checking service. Checking out a company's details can help you confirm if they have legal issues

Analyse competition

Through company checks, you can identify companies operating in your industry and analyse their performance. You can research how their brand is being managed through their social media platforms and what is making them stay ahead in the market

Identifying potential risks

As a small business owner, safeguarding your company from potential risks is essential. You shouldn't trust a business without checking it out first, this will help you spot any red flags that might lead you and your business to trouble.

Operational expenses

Business checks serve as formal instruments for payments related to operational expenses, such as supplies or payroll. They draw funds from the company’s business bank account

Verification

When hiring employees, conducting background checks is a common practice. Verifying education, work history, and criminal records ensures that potential workers are who they claim to be.

Find out if a company is in good standing

Company checks can help organisations or individuals find out if the company in question is in good standing and managed efficiently. You can find out if they are filing statutory documents such as accounts and confirmation statements on time. You can also find out if there is any mention of administration or insolvency.

Analyse the financial status of the company

If you want to partner with a company or offer financial help, a company check will help in identifying the financial health of the company.

Check who runs the company

Through a company check, individuals and organisations can check the owner of the company, director, and people with significant control. You can also verify the location of a company’s registered office.

What company information can I check publically?

UK-registered companies and LLPs have a legal obligation to file statutory documents after company formation to Companies House. Through Companies House Service and/or WebCHeck, business owners or entrepreneurs can access:

• ·         Date of company incorporation
• ·         Registered office address
• ·         Information about current company officers
• ·         Details of company shareholders, guarantors, or LLP members
• ·         Information about People with Significant Control (PSCs) – name, date of birth, contact address, and the nature of each PSC control in the company
• ·         Resigned company officers.
• ·         Details of disqualified company directors.
• ·         Director’s appointments held in other companies
• ·         Nature of the company’s business activities.
• ·         Previous company names.
• ·         Annual financial accounts
• ·         Confirmation statement
• ·         Statutory filing deadlines for the next accounts and confirmation statements.
• ·         Mortgage charges.
• ·         Company status

What are the risks of not conducting company checks?

Exposure to fraud and scams

In a world full of scams and con artists, not checking out a company thoroughly could leave you vulnerable to being hoodwinked. Don't let your business fall prey to the wolves in sheep's clothing.

Potential legal liabilities

Turning a blind eye to potential risks can legally land you in hot water. Ignorance is not bliss when it comes to business – it's more like playing with fire without knowing how to put it out.

Workplace safety

Without proper checks, you might unknowingly hire individuals with violent tendencies or a history of workplace violence. Workplace violence costs businesses billions annually.

How do you perform company checks?

To do a company check:

1. Enter the name of the company, its unique registration number, or the name of a company officer into the search field on the Companies House Service homepage.
2. Choose the relevant company or officer from the list to access the desired information.
3. For additional company details, click on any text highlighted in blue.

You have the option to register your information through this service, allowing you to "follow" specific companies and keep track of their updates; you will receive complimentary email notifications whenever the company submits new information or makes amendments to its registered details.

How to use the Companies House WebCHeck service?

The Companies House WebCHeck service is a free search facility that provides access to UK company data on the central public register.

Individuals using WebCHeck can search for information by entering either a company name or a company registration number. Furthermore, Companies House WebCHeck offers access to the filing histories of companies. Any member of the public can view and purchase copies of these filed documents and reports online.

Generally, information recorded in the public register is retained indefinitely. This consists of the information of individuals who are no longer associated with a company. Nevertheless, in certain exceptional situations, one may submit a request to Companies House to have their information removed for reasons of personal security.

What other ways can you conduct company checks?

Conducting a Google Search: A Google Search encompasses more than enough information, which can be basic such as products and services, reviews and ratings, financials, jobs, social media profiles, and contacts, among others.

However, detailed profiles are also available on other sites, for instance, Google My Business, which has features like business operating hours, an address visible on Google Maps, and pictures.

When searching a company’s details and negative news updates come along with the search, read through to understand if it is propaganda or if it's true. This can either give you a go ahead to partner with a company or a red flag.

Review public opinion: You can get the company’s public opinion on Google reviews, trustpilot, and comments on the company’s website. Through public opinion, you can understand the company’s reputation, its strengths and weaknesses, crisis management, and competitive analysis. One can get a lot from public sentiments because the public is always honest.

Trustpilot serves as an excellent site for looking up companies and reviewing their ratings. You may review other customers’ experiences, share your feedback, and look for reliable businesses. Every trust pilot review site has its trust score which is a numerical rating from one to five where five is given based on customer reviews.

If you see a one star rating from several customers, take their comment seriously and that may be a red flag.

Evaluate the company’s website: With a company’s website, you can access information on the About Us page. A company always gives details of what they do, their background, what they offer, and their values and mission giving snippets of the company.

Moreover, you can find a contact page where the company’s telephone, email, and postal addresses. Other companies have an investor relations section with financial statements and other information that is pertinent to the finances.

Through the company’s blogs and articles, you can access customers' comments. If the company’s customer service is poor, people tend to air their frustrations in any avenue they get.

Check the FCA register: You can check the Financial Contact Authority (FCA) of companies in the financial industry. It is important to be careful and avoid dealing with any financial services firm that is not included in the FCA register. Also, it is recommended to check the registration numbers displayed on the company’s website because some fraudulent companies may display fake registration numbers.

Payment method: By looking into the payment methods one can understand more about the nature of the company, its target market, and its business strategy in general. Payment methods may derive insights regarding the areas of operation, business model, and economic status of the company as well as the willingness to adopt modern means of payment.

The level of security tied to the payment method may also give an idea about the seriousness of a company towards protecting customer information.

How to protect your business interests through company checks?

Carrying out company checks is imperative for protecting your business interests in diverse situations. It is of utmost importance to carry out a detailed examination of a company’s past, whether you are assessing suppliers, looking for investment opportunities, or entering into joint ventures.

Vendor and supplier due diligence

Before purchasing from a supplier or a business, it is very important to verify their legitimacy. Checking the company before a possible partnership is a way to be sure that they are trustable, financially stable, and have a good standing in the market. Only this way will prevent any kind of losses and complications during business operations.

Securing investment opportunities

Investing in a company without thoroughly analysing it may be risky. By doing extensive checks on companies, you can evaluate the financial status, past performance records as well as growth prospects of any given company. This is crucial for companies or individuals that want to make investment choices.

In conclusion, company checks are incredibly important to safeguard individuals’ and businesses’ interests. Company checks will help people and businesses make informed decisions that protect their interests while at the same time reducing risks and constantly monitoring organisations. By adopting these practices, you will have the ability to go through the business landscape confidently knowing that partnerships and investments are based on openness and trustworthiness.

 Icon Offices can help you minimise tasks associated with company formation. We take care of all the paperwork for you and submit them to Companies House on your behalf. Once your registration is approved, we will send you your Certificate of Incorporation, Memorandum of Association, and Articles of Association.

For more information, visit https://iconoffices.co.uk or contact us at [email protected].