Whether you’re a small business or a big enterprise, the consequences of dealing with an illegitimate company are always harmful. For instance, let’s say that a young startup signed a contract with a supplier that doesn’t actually exist. That means the company got burned and lost time and money resources. And let’s not forget third parties and customers; they all require running a series of background checks. This guide will explain how to check if a company is legitimate.
It’s natural to worry about the authenticity of a company, especially if you think of doing business together.
Similar to Know Your Customer (KYC) regulations, where businesses verify their customers’ identities, it has become standard practice to check the authenticity of a company. This is where Know Your Business (KYB) compliance measures come in handy. To complete a smart risk-mitigation strategy and combat fraud more easily, businesses use automated KYB tools, such as Business Verification, to scan and check the legitimacy of any company, including its related individuals, who go through KYC checks.
While it took us a while, modern businesses are no longer annoyed to carry out due diligence and keep up with the ever-evolving regulations. Despite the positive, pro-compliance mindset, fraud remains a challenging issue that’s hard to tackle for many companies. Did you know that 90% of money laundering crimes are never detected? The United Nations claims that around $800 billion to $2 trillion is laundered annually around the world.
One thing’s for sure. Whether you’re a business or a customer thinking of making an online purchase, nobody wants to fall into a trap just to find out that the company or the website turns out to be a scam. Thankfully, being aware of the most common scamming techniques helps prevent unwanted losses.
How to Check if a Company is Legit in 2025?
Fraudsters often hide the true ownership of the company, use fake office address information, and build professional-looking websites to appear like legitimate businesses. However, there are certain red flags that help you determine whether the company is real or if it’s a front to fund a scammer.
Whether you’re onboarding a new vendor, investing in a firm, or launching a partnership, here are the key steps to verify another business’s legitimacy and avoid costly mistakes that can lead to non-compliance.
1. Review the Company’s Website
Naturally, certain red flags raise suspicion regarding the business’s authenticity. First things first, if you can’t find any contact information listed on the website, such as a legitimate phone number, and there’s no way to contact the company, chances are the business might not be genuine.
Remember that today, having an email address isn’t the most trustworthy indicator of the legitimacy of a company. That’s because emails and domain names are obtained more easily compared to offline contact information. Before engaging with a business, it’s wise to verify the email address to ensure it’s active and associated with a legitimate domain.
So, a trustworthy website of a legitimate business will always have:
- An HTTPS certificate (look for a padlock in the browser).
- Legal processes that reflect on the company’s Privacy Policy, Terms of Service, and cookie policy.
- Well-written content. Typically, there’s a blog, news page, About Us section, and other important information (look for poor grammar, as it’s a bad sign).
Fraudsters often use fake or untraceable contact details. To avoid this, make sure to:
- Call the number to verify that someone answers.
- Check the email domain (for instance, avoid free email providers like Gmail for business communication).
As an extra security step, you can check the company’s domain name to understand how long the website has been active using special databases, such as WHOIS.
If we take a look at financial institutions, they fall on the stricter side of the jurisdiction, which requires such regulated entities to provide the following data:
- Information about the company’s payment methods
- The purpose of business transactions
- The business’s location
- The nature of the company
- Information about partnerships and the company’s certificates
You need to verify this data as a way to assess standard company information, which is a part of the KYB framework for regulated, high-risk entities, such as banks. However, if you don’t fall under this obligation, it’s still a good idea to dig deeper and avoid the risk of doing business with a fraudulent entity.
2. Verify Company Registration in Official Registers
Use terms like “UK Companies House check” or “US Secretary of State company lookup” for accurate sources online. Most registers are available on the internet. For example, for UK entities, use the Companies House to view incorporation dates, registered name, company number, and director history.
However, if you’re operating on a global level, it’s a good idea to save time and implement a solution like iDenfy, which has built-in access to various government registries and government bureaus, including important databases that can be hard to reach sometimes due to country restrictions, formatting differences, etc.
Other search tips for verifying company registration:
- 🇺🇸 In the US, check the Secretary of State business registry for each state or use the SEC EDGAR database for publicly traded companies.
- 🇪🇺 In the EU, search the European EUID database.
- 🌐 Other regions: MCA India, ACRA Singapore, Hong Kong Companies Registry, ASIC Australia.
Related: How to Check If a Company is Legally Registered
3. Study the Address Information
Address fraud remains one of the most common types of fraud today. Usually, fictitious office addresses are used to launder money and hide from authorities. Verify the address using Google Maps and Street View to confirm it’s not a virtual office scam.
If you suspect that a company is fake, check the website and the listed address details. If there’s no address, take it as an instant red flag. Don’t be afraid to ask the company questions. You can also always phone the company and ask the manager to describe the surrounding area. Once you have this information, you can use Google Maps to check if it matches the description.
In case it’s a local business, as an alternative to the internet, you can visit the physical address to determine the location’s legitimacy. You can indeed learn a lot about a company by visiting its brick-and-mortar location. For remote entities, ask for photos of the working space or a video walkthrough of the premises.
4. Check the Company Number
A company’s registration number is a form of identification. The unique number is assigned by the national registration office and is commonly used in different legal contexts. The company number should be listed in the privacy policy or its terms and conditions if a business is legitimately registered.
For example, as a result of the First Company Law Amendment Directive, all limited companies in the UK have registered company numbers that are presented together with the company’s place of registration. Generally, a limited company is legally separated from its owners and managers, typically consisting of shareholders and directors. The company number remains the same even if the business changes its name, address, or shareholders.
You can always look beyond the basics by extracting and verifying additional details like:
- Ultimate Beneficial Owner (UBO) data
- Annual filings
- Operational history
- Incorporation status
- Certificate of Good Standing
5. Look for Grammar Mistakes and Other Discrepancies
Did you notice that there are grammar mistakes on the company’s webpage? This probably isn’t a coincidence. If the business location is registered in the USA, but you notice poor English, there’s a chance that the company is based overseas. If the business claims to be local, take this as a sign to check the company more thoroughly before jumping into any business agreements.
Another reason indicating that a company might not be genuine is an overall lack of professionalism. If you notice stolen copyrighted images and any inconsistencies, be careful. For instance, if the company claims to provide one service but then contradicts itself by showing false details about a completely different service, the company might turn out to be a complete scam.
6. Check if the Company Has a Privacy Policy
In general, having a privacy policy means that the company’s registered address and name are genuine, as this information needs to be included. Real companies have detailed Terms and Conditions and Terms of Use pages as well. Before doing any business with the company, always review the policies and look for suspicious-sounding language.
A real company typically has an About section where you can review its ethical background, such as the company’s mission, vision, values, or team members. That’s why you should also look through the company’s overall content and its history. If the company doesn’t have a history, you need to take it as a big red flag. Did you notice stock photos? No sign of decent product photos? Seems like a fake web business that’s trying to trick you into trusting them.
7. Search for Feedback and References
One of the most effective ways to find out if a company is legitimate is to search for feedback or any other forms of customer reviews online. The company’s website is one thing, but other websites and sources can provide more trustworthy details about the business. Remember, complaints aren’t always a huge deal, but you should look out for keywords like “scam” or “lawsuit”.
Naturally, a company that has been operating for several years might be more reliable than one that’s a few weeks old.
Take your time to look around. Of course, don’t assume that a company is authentic just because it has a few negative reviews. It’s important to check a few different sources and websites to better understand the company and its intentions. Businesses with a proven reputation and a professional online presence often comment on Trustpilot, Yelp, or other social media sites.
Watch for red flags such as:
- All 5-star reviews
- Multiple reviews posted on the same day
- No negative or mixed feedback
Use special search queries and targeted keywords at fraudulent entities, such as “[Company name] scam” or “[Company name] lawsuit”. Special AI-powered solutions like iDenfy’s Adverse Media Screening tool can automate this process and provide instant negative news search results by compiling results from various news outlets and search engines for you.
Companies often provide references on their websites. If that’s the case, you can phone the person giving the reference and check if the positive review is legitimate. If the company lists another business as a reference, you can run a quick background check and contact them as well.
It’s always a good idea to check the company’s partners. If you ask for a reference and the business refuses to provide it, take it as a signal to choose a different partner. You can request references from clients, suppliers, or past collaborators. Call directly and confirm:
- Project scope
- Timeline
- Satisfaction level
Alternatively, check for mutual connections on simple sites like LinkedIn.
8. Look into Accepted Payment Methods
Payment methods can signal suspicious operations. What’s worse than accepting cash? Perhaps checks. No matter if you’re a customer or a business, the number one rule to knowing if a company is legit is its payment methods. Be careful of companies that require accessing your bank account for big purchases.
Language like “act now”, “limited time” is commonly used in scams. If a business is pushing you to pay via gift card payments, wire transfers, or, alternatively, only cryptocurrency as the one available payment method, it’s likely that it’s a fake business. Typically, a legitimate company has a money-back guarantee. As a whole, it’s considered safe to pay through credit cards or such payment methods as PayPal. If the business doesn’t accept any of them, it clearly indicates that the company is suspicious.
9. Examine Other Official Sources and Documentation
You can check if a company actually exists using special databases, government bodies, and online tools. That’ll help you to determine the business’s authenticity more easily.
Here are some examples:
➡️ The Financial Services Register (FCA). Almost all financial service activities must be authorized by the Financial Conduct Authority in the UK. That means if a business claims to offer products linked to financial services, their website will appear on the register unless they are not regulated by the FCA, which is automatically a red flag.
➡️ Companies House. This is a unique database of all limited companies and limited liability partnerships recorded in the UK. If you’re doing business with such a company, that means they’ll be required to submit certain data to Companies House. The database holds information about a company’s address, status, previous names, and incorporation date. On top of that, it shows directors’ backgrounds along with their appointment history.
➡️ The US Department of Commerce. It has 13 bureaus working to accelerate the growth of quality jobs across the country. Additionally, it issues special business Due Diligence reports, including key information about the business, such as the name, address, type, sales territory, number of employees, or the established year.
➡️ Better Business Bureau (BBB). You can look up companies in the United States and Canada on the Better Business Bureau. Founded in 1912, this private nonprofit organization “helps people find and recommend businesses, brands, and charities they can trust.” BBB holds consumer complaints data, and you can also search where the company is located or where it’s doing business. You can type the phone number or an address, and it’ll show the specific company you are looking for.
10. Verify All Details at Once via an Automated KYB Solution
Manual checks are time-consuming. Scrolling through multiple news articles and bureaus online isn’t all fun and games. Reviewing all of the sources manually might be stressful. It’s easy to make mistakes and miss some important points, especially when doing complex, thorough company research on your own.
In general Automated Business Verification service or KYB usually entails 6 steps for a successful KYB check:
- Collecting Company Data
- Adding UBO information
- Cross-Checking Customer-Provided Data Against System Records
- Applying a Risk-Based Approach to Receive Alerts
- Using AML Screening
- Conducting Ongoing Monitoring
Address, status, location, office interior/exterior photos, shareholder information, director details, Ultimate Beneficial Ownership data, the company’s website/social media screening, and other details are also available via an automated business verification service.
Platforms like iDenfy help by automating checks and verifying if the business:
- ✅ Is registered in an official database
- ✅ Has a valid phone/email/address
- ✅ Has positive, independent reviews
- ✅ Is licensed (if in a regulated industry)
- ✅ Doesn’t have red flags in terms of payment terms
- ✅ Has verified UBOs (including screened against AML databases)
- ✅ Has all references confirmed
- ✅ Is not prohibited (or high-risk, depending on your risk tolerance)
iDnfy’s KYB platform has custom KYB workflows (and custom questionnaires to collect specific documents based on different business structures, such as sole proprietorship) that are designed to adapt to different industries (for example, there’s a fintech KYB flow, iGaming flow, etc.). This includes verifying standard business data automatically (such as address or website), including other more complex processes required for high-risk industries and their analysts, such as database verification (wth corporate registry checks), UBO verification, PEPs and sanctions screening, AI risk assessment and risk scoring, and more.
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