The company you’re about to trust: Seven checks before you sign

Before you extend credit, sign a supplier contract or take on a new client, you need to know who you are actually dealing with. Due diligence on a UK company does not have to be slow or expensive. Most of it comes down to knowing which checks to run, in which order, and which warning signs matter. This 7-step checklist walks through the seven checks that catch the vast majority of problems, whether you are a finance team onboarding a customer, a procurement team vetting a supplier, or a lender assessing a borrower.

1. Confirm the company actually exists

Start with a company register. Check the registered name, company number, registered office address and incorporation date. Make sure the entity you have been given matches the entity you would be contracting with. A surprising number of disputes trace back to invoices raised against the wrong company in a group, or a trading name that belongs to no registered entity at all.

2. Verify the directors

Look at who runs the company, how long they have been there, and where else they hold appointments. Check for disqualified directors, and look at the track record of past companies they have been involved with. A director whose previous three ventures went into liquidation is not automatically disqualifying, but it is something you want to know before you sign.

This check has extra weight right now. Since 18 November 2025, all new UK directors must verify their identity with Companies House under the Economic Crime and Corporate Transparency Act, and existing directors must do so before 18 November 2026. A company whose officers have not verified as the deadline approaches is worth a closer look.

Director verification functionality on the Company Watch platform.

3. Check ownership and control

Identify the persons with significant control (PSCs) and map the ownership chain. If ownership runs through layers of holding companies or offshore entities, keep asking who the ultimate beneficial owner is until you get a name. Opaque structures are not always sinister, but they are where fraud and money laundering hide, and they are exactly what anti-money laundering rules expect you to unpick.

4. Read the accounts, not just the headline

Filed accounts are the core of any financial health check. Look at trends across at least three years, not a single snapshot: turnover direction, margins, net assets, and cash. Pay attention to what small companies choose not to file. Micro-entity accounts limit visibility, so weigh that missing detail against the size of your exposure.

5. Search for court judgments and legal trouble

County Court Judgments (CCJs) are one of the most reliable early signals of payment problems. Check for outstanding and recently satisfied judgments, winding-up petitions, and charges registered against the company’s assets. A business with mounting CCJs is telling you, in public records, how it treats its creditors.

6. Screen for adverse media and sanctions

Run the company and its directors through sanctions lists and a basic adverse media search. For regulated firms this is a legal requirement under KYB and AML rules; for everyone else it is cheap insurance. Fraud investigations, regulatory penalties and insolvency rumours usually surface in the press before they surface in filings.

Some fraud signals hide in the filings themselves rather than the news. Vigilance™ scans Companies House filings for exactly these patterns, flagging anomalies such as phoenix activity, suspicious formations and rapid director succession before they become your problem.

7. Assess financial health, then keep watching

The biggest mistake in due diligence is treating it as a one-off event. A company that passes every check today can deteriorate within months. Filed accounts age, directors change, judgments arrive.

Two things close this gap. First, use a forward-looking measure of financial health rather than relying on past filings alone. Predictive scores that estimate the probability of distress, such as the H-Score®, are designed to flag deterioration before it shows up in the next set of accounts. Second, set up monitoring so you are alerted when something changes: a new CCJ, a director resignation, a late filing, a change of ownership. Continuous monitoring turns due diligence from an annual chore into an early warning system.

Doing due diligence at scale: from manual checks to automated screening

The seven checks above are the foundation, and for a single low-value counterparty you can run them by hand on Companies House in about half an hour. The difficulty comes when you’re onboarding dozens of suppliers or customers a month, or lending against a company whose accounts are two years out of date. In that case, manual checks don’t scale and they only ever show you a snapshot.

This is where a dedicated due diligence tool earns its place. Rather than opening ten browser tabs, platforms like Company Watch pull the filings, director history, group structure and financials into a single view and turn them into a forward-looking risk score. Our H-Score® forecasts the likelihood of business failure, and the Financial Distress Index (FDI) gives a clear, percentage-based read on how likely a company is to run into serious trouble, so you’re judging where a counterparty is heading, not just where it was at its last filing.

For regulated onboarding, Enhanced Due Diligence screens across 198M+ corporate records and 600B+ archived web pages to surface adverse media, hidden directorships and the connections a standard check misses.

In summary

For a low-value engagement, at minimum: confirm the registration, check the directors, scan for CCJs, and look at the latest accounts. For anything with meaningful exposure, work through all seven steps and put monitoring in place.

Everything on this checklist, from company and director verification to predictive financial health scoring, fraud detection and continuous monitoring, can be done in the Company Watch platform. One search, one view, alerts when anything changes.

Book a demo and run the checklist against your own portfolio.

FAQS

How can I do due diligence on a company?

Start with Companies House to confirm the company is active, check its filing and accounts history, and review current and former directors. Then assess financial health — ideally with a predictive score rather than raw figures — and screen for adverse media, insolvency history and linked companies. Company Watch brings these steps into one report so you can complete a check in minutes rather than hours.

What tools are used for company due diligence?

The free baseline is Companies House. Beyond that, risk and compliance teams use business intelligence platforms such as Company Watch that add predictive financial scoring (H-Score®, FDI), enhanced director matching, group-structure mapping and adverse-media screening — the parts a manual Companies House search can’t give you.

What checks should be done before lending to a company?

Before extending credit or a contract, confirm the company’s status and identity, review its latest accounts and payment behaviour, check for CCJs, charges and insolvency markers, verify the directors, and look at the trend in its financial health rather than a single snapshot. Company Watch’s H-Score® and Risk Rating give a fast, evidence-backed view of whether a business can meet its obligations, plus a suggested credit or contract limit.

Which company due diligence service is best for UK small businesses?

The best fit for a UK small business is a service that’s convenient, quick to read and doesn’t assume an in-house analyst. Company Watch is built for that — plain-English risk ratings, a single report per company, and predictive scoring that flags trouble early, so a non-specialist can make a confident go/no-go decision before signing.