Why verification matters
Entering into business relationships without proper verification exposes you to significant risks. Fraudulent entities may use false registration claims to appear legitimate, while genuine but problematic companies may have hidden issues that only emerge through careful checking. Systematic verification reduces these risks and provides a foundation for confident business decisions.
The European single market makes cross-border business common, but it also increases complexity when verifying companies. A company claiming to be registered in one country may actually operate from another, or the entity you deal with may be a subsidiary rather than the parent company you expected. Thorough verification clarifies these relationships.
Beyond fraud prevention, verification supports regulatory compliance. Many industries require due diligence on business partners, and financial regulations increasingly mandate know-your-customer procedures that include company verification. Establishing proper verification processes helps meet these requirements.
Basic verification steps
Step one: Confirm the registration claim
Start by identifying exactly what registration claim the company makes. This includes the country of registration, the registration number, and the type of entity. Examine any correspondence, contracts, or marketing materials for this information. Companies should provide their registration details clearly on official documents and their website's legal notice section.
Note down all identifiers provided, including registration numbers, VAT numbers, and any industry-specific authorisation numbers. Also record the company's stated legal name, which may differ from trading names or brand names used in marketing.
Step two: Search the appropriate registry
Access the official business registry for the claimed country of registration. Use our guides section for direct links to each country's registry portal. Search using the registration number first, as this provides the most precise match. If you only have the company name, search carefully and verify you have found the correct entity by checking additional details.
Compare the registry results with the information the company provided. The legal name should match exactly, including any legal form suffixes like GmbH, SARL, or BV. The registered address should correspond to what the company claims, though operational addresses may differ from the registered office.
Step three: Verify the company is active
Registry records should indicate the company's current status. Active companies are those currently registered and in good standing. Check for any indication of dissolution, liquidation, or insolvency proceedings. A company that appears in the registry but is marked as dissolved no longer exists as a legal entity and cannot enter into new contracts.
Also check the date of incorporation. A very recently incorporated company with claims of long business history warrants additional scrutiny. While there may be legitimate explanations such as restructuring, the discrepancy deserves investigation.
Step four: Cross-reference with VAT systems
For companies claiming VAT registration, use the European Commission's VIES system to verify their VAT number. This confirms both that the number is valid and that it corresponds to the company name and country you expect. A mismatched VAT verification indicates either an error or a potential problem.
VIES verification is free and provides immediate results for all EU VAT numbers. The system confirms whether the number is currently valid for intra-community transactions. Remember that VAT registration is separate from company registration, so verify both independently.
Step five: Review available documents
Many registries provide access to filed documents including articles of association, annual accounts, and records of directors. Reviewing these documents provides additional verification and context. Annual accounts show the company's financial position, while director records identify who controls the company.
Pay attention to filing compliance. A company that has not filed required annual accounts may be non-compliant with registry requirements, which could indicate management problems or imminent dissolution. Recent filings that show significant changes may warrant discussion with the company to understand the context.
Cross-checking identifiers
Legitimate companies have consistent information across multiple official sources. Cross-checking identifiers against different databases increases confidence in your verification. Discrepancies between sources require investigation and explanation.
Registration and VAT numbers
In many countries, there is a defined relationship between registration numbers and VAT numbers. Understanding this relationship helps verify that both numbers belong to the same entity. For example, Italian VAT numbers match the company's tax code, while Belgian VAT numbers derive directly from enterprise numbers. If the numbers you are given do not follow the expected pattern, investigate further.
Names across registers
The company name in the commercial register should match the name associated with VAT and tax registrations. Minor variations in formatting may occur, but the core legal name should be consistent. If different names appear for the same registration number, clarify which is the current legal name and whether any name changes are reflected in registry records.
Address consistency
Registered addresses should be consistent across official records. While companies may have multiple operational locations, the registered office recorded in the commercial register and the address on VAT registration should typically match. Significant address discrepancies warrant clarification.
Director information
Names of directors or authorised representatives should be verifiable in registry records. If someone claims to represent a company but does not appear in official management records, they may not have authority to bind the company to agreements. Always verify that the person you are dealing with has documented authority.
Official sources for verification
National business registries
The primary source for company verification is the national business registry where the company claims registration. These government-operated databases contain the official record of a company's existence, structure, and compliance. Direct access to official registries ensures you are viewing authoritative information rather than copies that may be outdated or manipulated.
European Business Registers portal
The European e-Justice portal provides access to the Business Registers Interconnection System, allowing searches across multiple EU member states. This is particularly useful when you need to verify companies in countries where you are less familiar with the local registry system. The portal provides links to national registries for detailed information.
VIES VAT validation
The VAT Information Exchange System operated by the European Commission validates VAT numbers across all EU member states. This free service confirms whether a VAT number is valid and provides the associated company name and address. Use this to verify any EU VAT number you receive.
National tax authorities
Some national tax authorities provide public lookup services for tax registration status. These may confirm whether a company is registered for specific taxes, though detail varies by country. Tax authority websites are also the authoritative source for understanding domestic tax registration requirements.
Industry regulators
For regulated industries, check with the relevant regulatory authority. Financial services firms should appear on financial regulatory registers. Healthcare providers require professional registration. Transportation companies need operator licences. These industry-specific registrations provide additional verification for companies in regulated sectors.
Warning signs to watch for
Inconsistent information
When information provided by a company does not match official records, this inconsistency is a warning sign. Small errors may be innocent mistakes, but significant discrepancies in names, numbers, or addresses suggest either carelessness or deliberate misrepresentation. Ask for explanation and documentation of any discrepancies.
Recently incorporated entities
A company incorporated very recently but claiming years of experience warrants investigation. While legitimate restructuring or rebranding occurs, fraudsters often create new companies to avoid history of problems. Check whether the current company has any connection to predecessor entities and verify any claimed business history.
Dissolved or inactive status
A company shown as dissolved, struck off, or in liquidation should not be entering into new business relationships. If someone presents credentials from a dissolved company, they may be attempting to trade on the former company's reputation while the actual entity no longer exists. Always verify current active status.
Missing or non-compliant filings
Companies that have not filed required annual accounts or other mandatory documents may be in breach of their legal obligations. This non-compliance may indicate financial difficulties, management problems, or general disregard for regulatory requirements. Consider this when assessing business risk.
Unusual registration patterns
Registration in jurisdictions known for minimal oversight, combined with business operations elsewhere, may indicate structure designed to avoid scrutiny rather than for legitimate commercial reasons. While international structures are common and legal, be aware of potential red flags in corporate arrangements.
Pressure to skip verification
Legitimate businesses understand and accept reasonable due diligence. If a potential partner objects to verification requests or pressures you to proceed without checks, this resistance itself is a warning sign. Honest businesses have nothing to hide from standard verification procedures.
Documentation and records
Maintain records of your verification activities. Document which sources you checked, what results you found, and when you conducted the verification. This documentation serves several purposes.
First, it provides evidence of due diligence if questions arise later. Demonstrating that you conducted reasonable verification protects against claims of negligence. Second, records establish a baseline for monitoring. By recording what you verified at the start of a relationship, you can detect later changes. Third, documentation supports regulatory compliance where know-your-customer obligations apply.
For significant business relationships, consider obtaining official registry extracts or certificates rather than relying solely on online search results. These documents provide dated, authenticated evidence of a company's status at a specific point in time.
Frequently asked questions
How often should I re-verify a business partner?
The appropriate frequency depends on the nature and value of your relationship and any regulatory requirements that apply to your industry. As a general guideline, annual re-verification is reasonable for ongoing relationships, with additional checks when circumstances change, such as new contracts, increased transaction volumes, or unusual behaviour.
What if I find minor discrepancies?
Minor discrepancies such as formatting differences, slight address variations, or outdated but not incorrect information are common and usually innocent. Raise them with the company for clarification and update your records with the correct information. The key is whether the discrepancy has a reasonable explanation and whether the company responds appropriately to your query.
Can I rely on documents provided by the company?
Documents provided by a company should be verified against original sources. A registry extract provided by the company may be genuine but outdated, or in worst cases, fabricated. When possible, obtain documents directly from official sources or verify their authenticity using reference codes or official verification services.
What verification is needed for small transactions?
Risk-based verification means that smaller transactions may warrant less extensive checking. However, basic verification including confirming registration status and VAT validity costs nothing and takes minutes. Even for small transactions, this basic checking is worthwhile to avoid obvious problems.
How do I verify a company's financial health?
Business registries record registration status but generally do not provide financial analysis. For financial health assessment, you may need to obtain filed annual accounts from registries, use commercial credit reference services, request financial statements directly from the company, or engage professional advisors for significant transactions.
What if a company is not registered in any database?
If you cannot verify a company's registration despite checking appropriate sources, this is a significant concern. The company may be operating illegally without required registration, may be registered under a different name, or may not exist at all. Do not proceed with business until the registration question is resolved satisfactorily.
Are there limits to what verification can reveal?
Standard verification confirms registration status and basic company structure but does not guarantee business quality, financial stability, or ethical behaviour. A company can be legitimately registered while still being a poor business partner. Verification is one component of due diligence, not a complete assessment of business risk.
Should I use professional verification services?
Commercial verification services compile information from multiple sources and may offer monitoring for changes. These can be valuable for high-volume verification needs or when you require information not easily accessible through public sources. However, for basic registration verification, direct access to official sources is equally effective and free of charge.