When forming a business relationship with a company, prudent businesspersons and consumers first conduct a background check on the company. Depending on the purpose and extent of the business relationship, you should search and review the company's legal history, property and assets, licenses and personal information of its officers. Although you can order a business background check from a professional investigative company, there are steps you can take on your own to investigate a company.
Find the company's official name and contact information. To help you accurately locate records on the company, determine whether the company name you have is an assumed name or if the business has operated under other names. The company's official name must be filed with the Office of the Secretary of State in the state of the company's incorporation or registration. For example, if the company is a small, local company, you can find the company's name using your Secretary of State's business records database online. If, like many large corporations, the company is incorporated in Delaware, you must access the business records through Delaware's Office of Secretary of State. When you find the business' file, review all of the documents that indicate a name change, such as a "DBA" or "Assumed Name" filings, as these will give you a list of all the names you should include in your further research of the company. You should also write down the address of the company's principal office and its directors.
Contact the Better Business Bureau. Once you have the official name or names of the company and its contact information, contact the Better Business Bureau (BBB) to determine if the company is accredited by the BBB and to review any complaints that have been filed against the company by consumers. Visit the BBB website (see Resources), input the company's zip code, then click "For Consumers" at the top of the page. On the Consumer page, click the link "Check out A Business or Charity." This will direct you to a page in which you can submit the company's name and contact information. Once a list of matching names loads, click the appropriate business name to access the BBB's records on the company. Here, you will find a letter grade the BBB has given the company indicating its reliability. Farther down the page you will find more contact information for the company, a consumer complaint history and government actions taken against the company.
Search UCC filings. Equipped with the company's correct business name and contact information, run a search through the state's Uniform Commercial Code (UCC) filing system to learn about the company's financial status with regard to secured loans. You can access your state's UCC filing system for free through the Office of the Secretary of State's website, inputting the correct name of the company. After inputting and submitting the company's name, a list of organizations will appear that matched your search. Click on each of these names to determine if the listed company is the company you are searching, then you can review copies of all of the financing statements listing creditors who have a security interest in the company's property.
Collect SEC records. If the company you are researching is a publicly-held company, you can access the U.S. Securities and Exchange Commission's (SEC) online records to learn about the company's securities transactions. Quarterly reports, annual reports, shareholders' letters, prospectus filings and other investment related documents are available for download on the SEC's website (see Resources). Investors can use this information to evaluate the company's stock and learn more about its board of directors.
Search for past and pending litigation. To accurately locate all past and pending civil suits involving the company, you should use an electronic legal database, such as Westlaw or LexisNexis, that will allow you to run a case name search and review cases. These electronic databases are the most powerful legal databases and can be accessed online for a fee. You can also contact a business background check company and request a civil suit search for the company you are researching. These services will also require a fee.
Searching local newspapers and business periodicals will also help you learn about the company's reputation in the community and learn more about its principal officers.
When ordering or performing a business background check, be sure to include common misspellings of the company's name. You should also avoid using acronyms or other unofficial names to obtain more accurate results.
The Fair Credit Reporting Act makes it unlawful for companies to use a business background check for certain consumer-related purposes, including extending credit to a consumer.
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