How to Check if a Company is Legally Registered?

With fraud and scams on the rise, fake companies have emerged everywhere. In such unfortunate times, doing business has become right? Closing a great business partnership begins with verifying the partner to know whether it is illegally registered and follows the standard compliance standards. One minor mistake in verifying the potential partner can cause really big trouble, leading to costly mistakes.

With the advent of streamlined company verification methods and procedures, organizations are able to expand their revenue by establishing relationships with only legally registered businesses. To verify the legitimacy of any company, you must go through a set of essential procedures to confirm its lawful standing. In this blog, learn how to check if a company is registered, no matter which country you are based in, what its challenges are, and how to streamline the whole process with KYB solutions.

Company Verification is Essential— Here’s Why

The benefits that company verification can provide are not only limited to businesses. Financial institutions and individuals who aim to search for a specific business can benefit if the company theory they are looking for is properly registered. Company verification safeguards businesses from falling into the pit of scammers, fraudsters, and other entities that could pose a legal risk to them.

Company verification is also essential because, without it, no business can establish secure relationships with other companies. There will always be a looming threat of multiple finanacial losses, legal risks, and penalties.

Better Decision Making

The verified status of a company benefits not only that business but also other entities that wish to cooperate with it. What this means is that every organization looks for essential documentation (financial and filing details, sanctions lists, adverse media, and other important records) before onboarding or losing a deal with a corporate partner. This enables businesses to make better and more informed decisions regarding partnerships, mergers, acquisitions, or investments, minimizing them from being exposed to potential risks.

Security Against Money Laundering

Using the comprehensive Know Your Business solutions enables you to stay at bay from bad actors. With digital advancements on the rise, the business world is now more vulnerable than ever before! Where fraudsters and criminals are devising techniques to exploit the corporate structure and regulations to ensure company verification, enhancing protection against money laundering. Companies that are legally registered for the standards compliance procedures and have properly acquired licenses from the relevant regulators. Corporate verification ensures compliance with anti-money laundering (AML) regulations and helps you avoid hefty legal repercussions.

Less Financial and Reputational Risk

Company verification is a comprehensive process. From searching an organization on the government portal to retrieving essential documents for authentication, everything requires efficiency. By verifying a company, you can know about unregistered or suspicious entities and work with only reliable businesses. Finances are the significant assets of an organization, and through verification, KYB checks help reduce financial risks by ensuring you are only dealing with lawfully operating entities.

More Reliable Partnerships

Another reason why company verification is essential is because when you properly authenticate a company’s credentials, it establishes trust and credibility in that business partnership. Business verification solutions can be used to establish reliable and long-term relationships.

Low Risk of Penalties

Operating within a corporate landscape means that, as a business entity, you must ensure that your business follows both local and foreign laws. When you want to check if a company is legally registered, you must analyze whether it complies with different regulations (such as tax, licenses, and industry-specific). Non-compliant businesses can be easily spotted if you conduct AML-integrated corporate verification checks. This method ultimately lowers the risk of penalties and legal disputes.

Spotting Potential Red Flags During Verification

The business verification methods and procedures are extensive for a variety of reasons, one of them being the complete scrutiny. When you are verifying the legal struts of a company, you may miss important details. Therefore, cross-verification of the company data is crucial. For example, a company’s registration date may not match the public records, or it may be missing completely. There can be a number of red flags that could signify potential fraud, scam, or financial crime.

Conflicting Company Data

Discrepancies in company details can be alarming. For instance, if the company website shows variations in address contrasted with that in the official documents, then it presents probable fraudulent or secretive dealings. Furthermore, inconsistencies or variations also include contact details and ownership details, which bring one to question the legitimacy of a company.

Non-Compliance with Filing Requirements

Organizations that are legitimately operating should be able to provide mandatory documentation to substantiate their existence and operations. Robust business verification procedures examine the complete business profile under examination, for example, checking documents like registration certificates, financial statements, and other required documentation. However, failing to provide essential verification documents is a big red flag that most likely indicates suspicious activities.

Intricate UBO Framework

The most obvious red flag during business verification is the intricate ultimate ownership structure because, most of the time, this means that you can’t identify the natural persons running an organization. The KYB takes a proactive approach to UBO identification while conducting comprehensive corporate verification checks. To check if a company is legally registered, identifying the beneficial owners is a critical step. We know how complicated this process can be, and to simplify the UBO verification for you, we conduct 3 different types of KYB checks, the final being the enhanced one that mainly aims for the most challenging verification process, i.e., UBO identification.

Negative Legal Record

Company verification is about checking whether a business has a history of legal disputes, penalties, or ongoing litigation. These pointers indicate that in a specific company, a shareholder or a UBO is potentially a risky partner. To gain a detailed insight into the company, checking the legal record of a company is crucial because lawsuits related to fraud, mismanagement, and financial instability can be the red flags that call for proper investigations.

Step By Step Guide to Company Verification

• Find the Official Public Portal: To check if a company is legally registered, you have to begin by finding the official portal of the country in which it is based.
• Enter the Required Input Parameters: Next, on the official government portal, enter the company’s name or registration number (the input parameters vary from portal to portal) 
• Collect the Company’s Basic Data: Once you get the data of a company, the next thing you should do is ensure that the verification details match (for example, incorporation date, address, and status)
• Verify Company Identification Numbers: Regardless of the country the organization is based in, every company is given an identification number. These unique identifiers prove that this business is legally registered as per the government protocols.
• Cross Reference with Reliable Sources: While checking if a company is legally registered, cross-checking the data is crucial. This means cross-referencing the acquired information against government databases such as sanction lists, PEP lists, and adverse media.
• Verify Licenses and Certifications: For smooth business operations, every business is given licenses and permits by the regulatory bodies of the country in which it operates. Make sure that the company you are looking for has the essential licenses for its smooth operations. For this, you can also visit the official website of the regulator and see if it publishes a list of legal and closed businesses to find the one you are looking for.
• Streamline The Verification Process: For a higher level of enhanced due diligence, trust The KYB to streamline your company verification process. We will acquire the essential information required to check if a company is legally registered in a specific region, saving you time and ensuring complete transparency.

Streamlined Business Verification with The KYB

Searching for multiple sources to check the legal standing of a company is a time-consuming process. Although some of the company data is available on public portals, business verification is still a process full of hassles. Our comprehensive KYB solutions detect illegal operating companies with our real-time data source business verification. Being the best corporate data providers, we ensure that you get the most updated state of the company you are looking for. We retrieve and consolidate corporate data sources from 250+ countries and states with 300M+ companies, all under a single platform. Use our efficient and reliable data sources and verify any company you want with just a simple click.