Five Fast Facts About Company Background Checks That You Should Know


Do you believe that background checks involve individuals only? Think again. If companies can do a little digging on individuals, it can happen the other way around, too—though it’s not a common practice. What’s common is companies investigating other companies due to business partnerships, agreements or conflicts.

Do you run your own company? Do you hold a position of trust in a large corporation? Here are important facts you should know about company background checks—and why you should consider it.

Fact 1: Businesses, corporations and organizations should be duly registered.

This is a fact that doesn’t need much explanation. Whether it’s a big corporation with 500 employees or a social enterprise manned by a five-man team, it’s only legal in every sense of the word when everything is registered or licensed down to the tiniest detail.

If you want to forge a partnership with a restaurant who has a legitimate business registration but does not issue official receipts to their customers, you need to take a few steps backward—and never look back. This is a common result in company background checks. Misrepresentation and failure to comply with country or state requirements have severe ramifications.

Fact 2: Court records reveal previous or current lawsuits.

According to a July 2018 CNN news article, pharmaceutical giant Novartis recalled the heart drug Vasartan from Germany and other European countries due to findings stating that the 2,300 batches sent contained a carcinogenic impurity. Can you imagine the legal consequences that the manufacturer may face because of this?

If your company background check reveals that there is no history of a lawsuit, well and good. If there is a dismissed lawsuit in favor of the company, take it with a grain of salt. Let your corporate lawyer analyze it to identify possible risks if you propose a partnership.

There is no perfect company, and even large corporations face a handful of complaints on a regular basis. A thorough company background check can give you an informed choice to push through any plans of partnering or merging.

Fact 3: Top-level executives tell a lot about the company.

Whether it’s the CEO, Director, President or Board Member of a leading corporation, or the investor or proprietor of a small yet lucrative business—doing a background check on these VIPs is a helpful add-on to a company background check. Their distinct status and exceptional skills and experience reflect how a company is doing, especially in the aspect of employer-employee relations.

Part of doing a background check on these individuals is knowing their past affiliations. Where did they obtain their academic degrees? Are they in good terms with former business partners? How do they handle employee grievances? What do former and current colleagues say about them?

These questions tell a lot about how they work and how well they handle the company, and the answers can help you arrive at the best decision.

Fact 4: Online footprint mirrors a company’s best and worst practices.

You don’t need a security firm to perform a quick Internet search on a certain company or group. Social media is a popular platform where people can share virtually anything.

When a retail store becomes known for its excellent customer service, people will share about it online. In comparison, when an ill-behaving waitress gains exposure, people will still rant about it online. When the content is exceptionally engaging, regardless if it puts a certain business in a good or bad light, it becomes viral and leaves a virtual footprint that will stay for a long time.

You do need a security firm to perform a company background check on how a business handles negative news and reviews online. Companies nowadays form a social media management team to make sure their online presence remains positive.

Fact 5: A face-to-face encounter gives more clues about the company and its dealings.

It’s true that there are always two sides of a story. Even in company background checks, interacting with the representative tells a lot about the company. This gives the company a chance to personally raise, explain or propose important matters to you.

A sit-down chat can gauge how well the business representative responds to your questions. You can also personally profile the company and assess how you can work with them in the future. Did the representative come on time? Is the company results-driven? Is the company professional in all of their corporate dealings?

When you feel at ease speaking with the manager of a certain business that you would like to work with, it makes decision-making easier. This is another helpful supplement on top of a typical company background check.

Considering all these facts about company background checks, you will need the expertise of a security firm or agency who can provide this service to you. A comprehensive background investigation of a company will require a lot of records requested from several government offices and private firms. Like persons background check, expect to see results in aspects like business registrations, labor complaints, credit history and criminal history.

A company background check is a recommended measure when planning to do business with other companies. If you are a business owner or hold a top position in a corporation, you know that a thorough screening of all possible business associates is a must. Before forging any partnership or agreement, a company background check is therefore a smart investment to ensure that your business remains thriving and reputable.