Five Ways Red Flag Alert Helps Start Ups And Scale Ups Grow
by Rory Traynor
Credit risk management is important for businesses of all sizes, which is why it’s vital to research potential business partners. One useful way to find out otherwise hidden information regarding a company is by performing a director search on companies house.
Director searches provide up-to-date information about those running a company and who are responsible for making top-level decisions, allowing you to deduce whether you should go into business with them or not.
In this article we’ll investigate what a director search is, why they’re important, how to complete a director search, due diligence surrounding them, and how Red Flag Alert can help.
What is a Director Search?
Director reports gained from doing a director search show real time information including personal details, report summaries, a reliable history of previous company directorships, live directorships of enterprises (trading and non-trading), as well as resigned directorships and any dissolved companies.
Red Flag Alert’s in-depth tool includes data from a wide range of sources:
· The UK electoral roll
· International PEPs
· International passports
· ID cards
· The insolvency registers.
All provided in real-time to ensure you always get the best information available.
If you’re a potential creditor, completing a director search can help you properly assess the credit worthiness of a particular business, based on the past successes of its company directors, helping you make more informed and confident decisions.
There are many reasons to complete a director search, this includes:
· Protecting your company from individuals who carry bad debt (may have a past of making lucrative investments).
· Determining a director’s general credentials from their business history; this includes companies they’ve previously had a directorship with.
· Checking the solvency information of a director’s past companies can help you better understand whether a director was involved with any failed businesses in the past.
· Since these checks are publicly available, directors can easily check their own reports to see whatinformation is held about them.
· If you want to get into business with a specific director, these reports can help you to gain important background knowledge which may be advantageous.
· To highlight if a director has a history of phoenixing insolvent companies.
Why Do Companies Need Access to Real Time, and up to Date Director Data?
When you have access to information about individuals in charge of companies, it can shed new light on their business’s viability, prospects, and overall credit worthiness. This gives you the advantage of being able to make more informed decisions about who you get into business with.
Below I’ve listed some key reasons why performing a director search can be crucial to protecting your business from risk:
Directors are key people within organisations.
- A director’s role is to oversee the running of the company, which means they tend to wield a significant amount of influence over not only the culture and values of the business, but also the financial and operations side.
- If a director is not performing well, the business could be suffering as a result.
A Director’s history is often a good indication of their current capability.
- A director’s history (e.g., how long they’ve occupied past roles) can give an indication of whether or not they were a good fit for responsibility.
- Checking companies listed as previous directorships and if they’ve been dissolved or liquidated will naturally raise a red flag. You can also see how the company performed under their directorship.
- A long history of failing companies demonstrates poor management/organisational style that is likely to continue into the current business.
- Red Flag Alert’s director search runs an individual’s name against the Insolvency Register. If the director has ever been declared personally insolvent, then they may be a risk to do business with.
Potential trends
- Trends such as high turnover of people in director positions could demonstrate an unstable organisation.
- Trends such as credit rating dropping, CCJs etc. can give an indication of what’s going on inside a business, and if it only started or increased when a certain director joined the company, it suggests they are the reason behind such issues.
See if anything illegal has taken place or they’ve been disqualified.
- Performing a director search can allow you to see their registered address, date of birth etc. so you can fact check this against what they have told you.
- The search will also show you if a director has been disqualified for any illegal activities; always be aware that if a director has been disqualified, it is against the law to deal with them. Concerns have been raised previously around Companies House money laundering loophole.
How to Perform a Director Search
Red Flag Alert offers detailed director checks for businesses in a range of financial sectors who need fast access to real time UK director information.
These searches can be completed through using a director’s name, county, postcode, or date of birth to access a wealth of data about company directors in seconds. Our company director search includes data from a range of sources to give you the whole picture; helping to identify current directors and changes in key appointments, as well as a deep dive into the business interests of individual directors, allowing you to perform detailed UK director searches in an instant.
Due Diligence
Carrying out a director search on a company before you decide to go into business with them is extremely important, as it allows you to gain a much deeper understanding of them and whether they would be a ‘risky’ business partner.
Researching company directors is a crucial part of a robust due diligence framework, and AML regulations require you to know who you are dealing with. It is important to make sure you’re not dealing with a director who has a shady past and is therefore untrustworthy from a credit perspective.
The advanced company director search tool offered at Red Flag Alert offers a complete know your customer (KYC) and anti-money laundering (AML) solution to give you powerful insights into company directors and their history. This not only enhanced your due diligence model but helps to provide a smooth and confident onboarding process for new clients.
How Red Flag Alert can help:
The best way to protect your business from risk, is to avoid any threats such as untrustworthy directors through completing a director search. By offering enriched data and up-to-date insights, Red Flag Alert is trusted by over 1,000 small business and industry leaders.
Benefits include:
· Real-time data -Always updated meaning you can stay alerted to any changes as they happen.
· Identifying ultimate beneficial ownership (UBO)- Our platform can help you find UBOs, and links they have with company directors, so you have a full understanding of the relationships between different parties.
· View global corporate linkage - Understand whether directors are involved in multiple companies and where they are based, as well as offering key financial information and insolvency risk of the companies a director is involved in.
· GDPR compliant data -All our data is GDPR compliant, and pulled from multiple, trusted data sources.
· Exceptional customer service - Our dedicated customer success team are on-hand to answer any queries you may have, and to get the most out of our data intelligence.
Protect your business from risk and make more informed decisions, get started with your free trial today.
