Before doing new business, every company needs to be explored and weighed in terms of how they fit your criteria. But what’s more important? Turnover? Net worth? What about the director? There is no real universal aspect that is classed as more important to look for in a business than the other. Every company has their own specific needs and characteristics that they need a company to possess if they are going to go into business with them. However many businesses fail to run a director check and underestimate the importance of it. Businesses are run by people at the end of the day, and if you can’t trust the person who is running a business your company is dealing with then the situation isn’t going to work.
A director search should be on your to-do list when investigating a new company, especially as you could be dealing with this person when doing business. A limited company is run by one or more directors, and even if it’s not them who runs the business single handily, the company usually has a lot of the director’s culture, beliefs and morals structured within it- especially if that director started the business. Becoming a director requires no qualifications or special tests to pass, if you have the money to start a business, you can do it. It’s always best to check who you are dealing with beforehand. If you have a good director, there’s a good chance you will have a good company as they are mainly the decision makers.
Here are three things you can check a director for to make sure he or she is the one for you and your company.
- Their past
A Creditsafe credit report will allow you to check a directors previous appointments and where they have come from. A director’s report will tell you what company they were previously appointed to, what function they held in that company and what date they were appointed and resigned. When looking into a director’s past you can start to piece together how they got to where they are now and what their journey has been along the way by looking at their director’s report. The report will also show the status of any previous companies, and if their still active it will show their current credit rating and the credit rating it was when the director in question resigned. This allows you to see whether the director was benefitting the company and running it to a high standard or if they were the reason for a low credit rating if things weren’t going well. It can give you an idea of what kind of work ethic the director has. For example, if a director has resigned from 3 other companies that all had a very low credit rating when that director was appointed, but rose when they left, it could mean the director isn’t running a company in the best possible way.
- Their present
When doing a director search on a director of the company you may be thinking of doing business with, you can also check what other appointments they have. For example, a director’s report will list all the companies that director is appointed to and give you information such as;
-The company name and number so you can then look at the company’s credit report
-The function that person has at the company
-Company status- if the company is still active or not
-What date the director got appointed
-The company’s turnover
-CCJ volume of the company
-Company incorporation date
-Net worth of the company
This allows you to see how they are dividing their time and the likelihood of actually dealing with them if you need to. For example if they have a business in the UK and another 4 businesses abroad, where will they be spending most of their time? It’s good to check these things for peace of mind and to know that a director is always accessible to you if you are ever having trouble with the company.
- Are they hiding something?
When you open your own company, you have to go and register with Companies House. If you have a bad track record and want the slate wiped clean, you are able to alter your information slightly and you will come up as a brand new business owner on the system. For example, if you have always traded using your forename and surname, adding your middle name will allow you to be on the system as a different person under Companies House regulations. Creditsafe aim to combat this by giving you a ‘Possible Matches’ section on a director search. When you view a director’s report, the system will return any results that match the same as the director you as searching internationally. For example, if another director has the same surname or date of birth, or the same last filed address as another director on the system are highlighted in the Possibly Matches section. This allows you to locate even the sneakiest of directors and uncover anything they could be trying to hide.
So what are you waiting for? Do your due diligence and make sure that includes director checks when doing new business!