Let's imagine the following scenario:
You're thinking about starting a business relationship with a new supplier. You've looked on the supplier's website and it seems like they have a really excellent product range and they have worked with some interesting customers. If you decide to enter into a contract with this supplier, then your Accounts team may well pay an external organization to carry out a credit risk analysis for you. But, before you get to that stage, what company information is freely available to you and what it can tell you about the new supplier?
In this article we're going to be looking at where you can find company information and what that information can tell you. We will further develop the topic in a series of articles, dedicated to specific countries and their particularities in terms of company information made available to public.
Where can I find company information?
Company information is held by national registries.
If you click on the following link, it will take you to a list with links to the websites of company registries located worldwide: https://www.gov.uk/government/publications/overseas-registries#reg
What information is typically held by company registries and what can it tell you about the potential supplier?
In most territories, companies will be obliged to file certain information with their national company registry. Some registries will make a charge to access the information, but, in the majority of cases, certain key information is freely available upon a web search:
1. You can find out when the company was registered and the registered office address
This means you can find out how long the company has been trading for. This might give you an idea of whether you are dealing with a long-established company or a start-up. You can also find out the registered office address for the company. This is the official address for the company.
2. You can find out who the officers of the company are
This means you can check who the directors of the company are. So, if your contact at the potential supplier has told you they're a director, you can check whether this is the case.
3. You can check if the company is still trading
The register will tell you if the company has ceased trading, if it is dormant (inactive) or if it is insolvent. If the company is in liquidation this will obviously raise alarm bells about doing business with this supplier.
4. You can access the company accounts
Some registries make company accounts freely available although note of course that they are likely to be at least 12 months out of date. Depending on the size of the company, you will be able to find out a bit about its activities and performance. You can often also find information about financial results and dividends for the company.
5. You can find out if any charges are registered against the company
A charge is the security the company gives for a loan. Some registries can tell you whether the company has taken charges over property or other assets and whether those charges have been satisfied (paid off). It's not unusual for companies to take out loans but it might be a good indicator to conduct further due diligence.
Going through these steps will offer you the base for deciding if pursuing a commercial relation with a specific supplier is desirable or not. If no alarms bells were raised from what you found in the public domain, then the assumption that the supplier meets the basic requirements can be made.
In our next articles we will be looking specifically at what company information is available from the registries in the territories of the United Kingdom, France, Switzerland, Germany and USA.
Originally published July 30, 2018
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.