Company Check

Company Check

A company check is a versatile tool with multiple applications. Most individuals keen to start a business always carry out a company check for ascertaining the availability of a specific company name. The Web Check service of Companies House, for instance, provides a free searchable company names and address index. The preliminary company check is equally easy in Australia. The Australian Securities & Investments Commission provides a free searchable index of corporate and business names.

Main users of Company Checks

A company check is used extensively in the financial services industry. Lenders such as banks always perform a company check for deciding upon credit applications. In case of banks, a company check more or less means buying a credit report from credit reference agencies. Leasing companies also use credit reports for deciding upon new applications.

A credit report, comprising background information, payment history and public records information such as county court judgements, helps in assessing the creditworthiness of companies. Increasingly, banks are also looking at the credit score of business applicants. A credit score compares the information on a specific business with that of similar businesses to compile a statistical score. This score indicates the creditworthiness of a company.

A company check has also become important for suppliers. Most suppliers use a company check to decide whether to supply goods and services to a company or not. Company registration authorities, in most developed countries, provide web access to the information filed by companies. Companies House in UK, which incorporates and dissolves companies, provides electronic access to the public through two services: Web Check and Companies House Direct. Most company information such as annual returns is now available online. Typically, suppliers either scan information filed with Companies House or a buy a credit report.

Problems with Company Checks

In the past few years, however, the credibility of this form of company check has suffered due to the growing incidence of company identity theft. A large number of companies do not check if the information filed with Companies House is fraudulently changed or not. This has allowed criminals to submit forged documents seeking a change in the address and other important details of a company. The criminals then use the stolen company identity to purchase goods and services.

Companies House and the Metropolitan Police Service have a launched a joint effort to prevent company identity theft. A major initiative is allowing companies to opt for secure electronic filings. Companies House will not accept paper documents for such companies. An email alert service of Companies House, meanwhile, issues alerts in case of any changes to the company's details. The businesses, which avail of these services, will be less susceptible to company identity theft.

A company check has also become a tool for securing competitive intelligence on business rivals. The information filed with regulatory authorities, credit reports and media reports provide insights into the operations of competitors. Other lesser known applications of the company check include identification of acquisition targets. A company check is indeed a versatile tool, lending itself to many uses.