A company accumulates a legal background and a credit history, just like a private individual. To run a background check on a company, you need to look at a collection of private records and public data. On sites like https://unmask.com/, which specialize in such checks, you can search public records. However, that isn’t your only recourse. This article will outline the steps to take to run a background check on a company.
Start with Government Sources
The Federal Trade Commission regulates every US-based company’s trade practices. It has two main responsibilities: to investigate and stop coercive monopoly formations and unfair trade practices and to foster and promote consumer protection. The SEC (Security and Exchange Commission) regulates financial companies besides the FTC. The American Bar Association regulates law firms, as do state bar associations.
If you’ve decided to run a check, one option would be to start by collecting SEC records. You can access their online records if you’re checking a public company to find out about their securities transactions. Under Resources on the SEC website, you can download annual reports, quarterly reports, prospectus filings, shareholders’ letters, and other investment-related documents. If you are thinking about investing in the company, you can use this information to find out more about management and stock.
To do a background check, you go by the company’s industry. For example, you would check your state’s professional regulation authority if you were thinking about purchasing a hair salon to see whether the employees are licensed.
Search Uniform Commercial Code Filings
To find out more about a business’ financial status, search your state’s UCC filing system. You need the right company name and contact information. Access to this system is free through the Secretary of State’s website.
A list of companies matching your search will appear after you enter and submit the company’s name. From here, just choose the company you are searching for.
Searching for Litigation
To accurately search for and find past and present litigation, use LexisNexis, Westlaw, or another electronic legal database enabling you to review cases and perform case name searches. You need to pay to access these electronic databases online. You can also ask for a civil suit search on the business from a background check company. This service is available for a fee too.
Look for property tax records and district court records. District court records will show whether the company has been or is involved in a lawsuit. Check tax records for liens on the property, on which the company operates. To check if the business has been implicated in a federal lawsuit, ask an attorney to perform a federal record search.
The Better Business Bureau
Information about companies is made available to consumers by the Better Business Bureau, who give companies grades from A to F. Core services include fraud prevention, business ethics and education, truth in advertising, consumer education, and dispute resolution between clients and businesses.
Business reporting services will draft an accurate and reliable business credit report for an average of $60. Among the reputable services are Experian, Dun and Bradstreet, Equifax, and Smart Business Reports.
An education verification check or professional license background check serves to prove that an entity really does hold a valid license. Some sectors depend on professional licenses to make sure people working in the sector have the required knowledge, experience, and credentials.
Typically, screening companies get in touch with the relevant state or industry licensing board to check whether the entities actually hold the licenses, and these are, in fact, valid. The board will check if there are any violations and restrictions connected to the license and that it is in good standing.
All companies in certain industries need a professional license background check. These include businesses in education, in the financial services industry, including insurance, banking, accounting, real estate, and financial planning, and home contractors. This last group includes builders, plumbers, and electricians.
Contracting a Company to Conduct a Check
A consumer reporting agency can help you conduct a background check on a company, but what should you look for in one? Comprehensive reports are of paramount importance. You want your report to contain all the relevant data when you get it back from them. You want to know about employment records, civil records, credit reports, workers’ compensation history, and more. You also want the company to be reliable. Due diligence is critical, as lots of businesses will say they perform background checks. Your provider of choice must be trustworthy and reliable. They must comply with the Fair Credit Reporting Act. You’ll benefit from a company with membership in the Professional Background Screeners National Association.
To ensure quality products and services, ask for references. Last but not least, ask about turnaround up front because long turnaround times can delay important decisions, like whether to do business with a certain company or not. You should always have a clear answer as to when you can expect the report.
