Checking a company before doing business

Companies House is a useful starting point when checking a UK company, but a register entry is not a guarantee of creditworthiness, professional authorisation or the quality of its work. Use the public record to identify the counterparty and frame the further questions that matter to the proposed transaction. ^[1]

Confirm the exact legal entity

Obtain the full registered name and company number. Compare them with the quotation, contract, invoice and website disclosures. Similar names and shared branding can conceal the fact that different companies are involved.

If a salesperson refers to a group, identify which company will owe the contractual obligations and receive payment. The financial strength of a parent company does not automatically support a subsidiary's debts without an appropriate arrangement.

Review status and filing history

Check whether the company is active, dissolved or subject to a relevant register notice. Look at incorporation date, name changes, accounts and confirmation statements. Recent changes are questions to understand rather than automatic proof of wrongdoing.

Read the underlying documents where the transaction warrants it. A summary page may not explain a charge, a qualified accounts statement or a sequence of ownership changes. Record when the search was performed because the position can change.

Understand the limits of filed accounts

Public accounts may be historic and may contain limited information where the company qualifies for a reduced disclosure regime. They do not necessarily show current cash, unpaid invoices or a new liability arising after the reporting date.

Ask for current information proportionate to the risk: references, insurance evidence, management accounts or a payment schedule. For regulated work, check the relevant regulator separately rather than assuming company incorporation establishes permission to provide the service.

Check the people and transaction details

• Confirm the person negotiating is acting for the identified company.
• Review officers and relevant ownership or control entries.
• Investigate unexplained changes in bank details independently.
• Consider registered charges and financing restrictions.
• Keep the evidence used to approve the counterparty.

Match the checks to the exposure

A small one-off purchase and a large advance payment for bespoke work need different levels of review. Consider the amount at risk, the length of the relationship, recovery options and whether security or staged payments are appropriate.

Match the check to the transaction you are considering

A one-off purchase paid on delivery and a large unsecured credit account create different exposures. Write down what could go wrong: non-payment, loss of a deposit, service interruption or reliance on a claimed licence. This helps select the additional checks needed beyond basic company identity. A long report is less useful than a focused answer to the risk you actually face.

Use the company number to connect the quotation, contract and public record. If the invoice names another group entity, ask why and identify which company will owe the obligation. Shared branding does not make every company in a group responsible for another member's debts. Resolve the contracting identity before payment or signature.

Read the dates behind the information

Accounts describe a past reporting period and may contain limited public detail. Check the period end, filing date and whether more recent management information is needed. An apparently healthy historic balance sheet cannot show every later cash-flow problem. Similarly, an active register status is not an assurance that current obligations are being paid.

Look at filing continuity and changes that matter to the proposed deal. A recent director change or registered office move may have an ordinary explanation, but a material inconsistency deserves a question. Avoid treating one isolated feature as proof of fraud or insolvency. Ask for the relevant evidence and consider the explanation in context.

Verify authority and payment instructions separately

Confirm that the person negotiating can act for the identified company. For a significant commitment, ask what approval is required and who will sign. A familiar email signature or senior job title does not answer every authority question. Where execution formalities matter, have the final signing arrangement checked.

If payment details change, use a trusted contact route already established with the counterparty. Do not rely only on the contact details in the message announcing the change. Companies House information can help identify the company, but it does not authenticate a bank account or establish that a particular email came from an authorised employee.

Record the decision and its limits

Keep a dated note of the checks performed, documents reviewed and unresolved questions. Set proportionate credit or deposit limits where the remaining exposure warrants them. If a material new fact appears before completion, revisit the decision. Due diligence should support a commercial judgement, not become a label suggesting that no further risk exists.

Use Companies House documents for due diligence to select supporting public documents. For assistance reviewing the company filing record, Companies House filing review explains the relevant assistance to discuss.

For example, an apparently established brand may contract through a recently formed company. That does not necessarily make the deal unsuitable, but it changes the questions about resources, guarantees and delivery responsibility. The useful output is a recorded decision based on the actual contracting entity, with unresolved points addressed before commitment.