Business Background Check

Checking the background of a business or company you intend establishing a relationship with or hiring is necessary to make sure the company has a good reputation, is licensed properly, and that there are no liens, judgments, bankruptcies or civil actions involving the company or its principles

Step 1 - Confirm the Company Reputation

Community Resources
Valuable information can be derived in records maintained at the local community. Every business, except the multinational corporations, has its community roots and is in conformity to local laws and ordinances. The locality in which the business was established can be the main source of information about many businesses.

Civic or business groups like the Filipino-Chinese Chamber of Commerce and Industry can be one reliable source of about the firm you are probing. This is unless they are cooperative and will provide you with information.

Published Items
Widen your research by including articles about the firm and its principles in the community and national newspapers in your work.

Step 2 – Verify the Company's Reputation
Be sure to ask for references when you will be doing business with a company or hiring a company’s service. Visit their office or call them up. Ask specific questions, converse with and you can derive good information. But the most reliable informants are their clients and former clients who can provide you the best picture of the company.

For some other references, the partners, suppliers, vendors, creditors and employees of the company can give further information.

Business Licensing
Every entity or individual who intend to do business in certain area is required to have license. So if you intend to contract its services, ask for business card. If the license number is not in the card, then verify it at the licensing office or at the Department of Trade and Industry.

Federal Employer Identification Number, FEIN
Just like each US citizen (and each person legally working in the USA) has an assigned Social Security Number (SSN), all US corporations have a Federal Government assigned number, it's called 'FEIN,' or Federal Employer Identification Number. It can be easily traced. Start at the local company level. Large corporations are a vast storehouse of public information.

Step 3 - Delve into the Background of Company and Principles

You may decide to conduct an even more in-depth investigation by checking the background activities of partners and owners. You want to know if there is any litigation against the company or the people who make the company decisions. Have they been sued and do records exist of resulting judgments and liens? An isolated instance or two may not indicate much, but a pattern of reoccurring litigation should be taken into serious consideration.

Exploration of court records is an integral part of conducting business background check. In case something do turns up, whether legal or civil proceedings, initiating a more in-depth business background check is imperative. Getting the necessary information through a business background check will help determine what legal obligations and sentences have been incurred by the business in question. Entrepreneurs can avoid initiating high-risk transactions when they are armed with appropriate knowledge obtained through business background check. Another particular aspect that would need to be included in business background check would be the involvement of the company in labor disputes, as these provide clues on how the business entity is ran internally.

Never forget the financial aspects. A good and comprehensive business background check always contains financial details on the company in question. Providers of information should include the current as well as past financial status of the company in any business background check. Financial statements on most large companies are available to the public, allowing anyone who cares enough to conduct business background check. However, obtaining credit history and credit standings are the more tricky aspects of the process, and most individuals conducting business background check employ different strategies and means to get the necessary information. However, interested parties should not let this discourage them from proceeding with the business background check, as ample and appropriate knowledge is an absolute imperative in any kind of business transactions