"Is this business legitimate or a scam?" is a common question that people ask before engaging with a new company. Unfortunately, with the growth of online businesses and the ease of setting up an online presence, there has been an increase in the number of illegitimate businesses. Working with an illegitimate business can result in lost money, wasted time, and even fraud, emphasizing the importance of conducting thorough due diligence before forming business partnerships. Therefore, it's crucial to know how to check if a business is legitimate. Here are five steps you can follow to check if a business is legit:
The first step in checking if a business is legitimate is to find the legal company name and address. You can usually find this information on the company's website. However, some businesses use alternative names that are different from their legal names.
Most legitimate businesses have a privacy policy listed on their site, usually located in the footer. The legal business name, alternative names, and address are usually mentioned in this privacy policy. Write down the names and addresses as these will be used to verify if the business is legitimate.
Once you have the legal name and address of the business, the next step is to check if it's legally registered. You can do this by searching the Secretary of State website in the state where the business is operating.
If you don't have the time or don't want to do the research yourself, you can use websites like Open Corporates or our services to check the business's registration status. Additionally, conducting a UCC Search can provide valuable insights into any secured interests or liens against the business, further verifying its legitimacy.
If the company is listed as inactive, dissolved, or unknown, it means they are not legally registered to operate business in that state.
After checking the registration status, the next step is to search for negative news about the business. You can use search engines like Google to search for the company name in quotes. Adding quotes around the company name ensures you are only pulling back results that directly mention the company. Make sure to use both the legal company name and any alternative name that may be associated with the company. If there are many results, you can add keywords like "scam" or "fraud."
Additionally, you can check the Better Business Bureau (BBB) and other review sites to see if there are any negative reviews or complaints about the company.
Another way to check if a business is legitimate is to see if any employees work there. You can use LinkedIn to search for employees who list the business as their employer.
Once on LinkedIn, put in the company name in the search bar, under the ‘People’ section, you can usually find employees who list the company as an employer. If you can't find any employees or if the employees seem fake or not genuine, it's a red flag that the business may not be legitimate.
If you're still not sure if the business is legitimate, you can order a business background check. Services like Business Screen offer this service, which can provide you with information on the business's legal history, financial issues, business credit report, and any officer/owner criminal activity. Though this check does cost money, it can save you a lot of trouble and prevent you from falling victim to a scam.
In conclusion, the increasing prevalence of illegitimate businesses and online scams poses a real and frightening threat to your financial well-being and reputation. The five steps outlined above, while helpful, may not be sufficient to protect you from sophisticated fraudsters who know how to evade detection. Gaps in these steps, such as the challenge of searching the correct public records or the limitations of searching for negative news, leave you vulnerable to deception and exploitation.
Business Screen, with its comprehensive due diligence background checks on companies and their officers, can fill in these gaps and provide a formidable line of defense against the nefarious tactics employed by unscrupulous operators. By offering detailed information on a business's legal history, financial issues, business credit report, and officer/owner criminal activity, Business Screen uncovers hidden risks and empowers you to make informed decisions, minimizing the chances of falling prey to fraudulent schemes.
Don't let fear and uncertainty jeopardize your hard-earned money and professional reputation. Choose the unparalleled protection offered by Business Screen and shield yourself from the lurking dangers in today's increasingly risky business landscape. Remember, it's always better to be safe than to be ensnared in the treacherous web of scams and fraud.
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