Why is this important? For at least three reasons: money, time, and security. Without proper due diligence on your business partner, you risk losing money and another equally valuable resource—time. Whether you`re a client or a service provider, there`s always a level of risk involved. It`s crucial to verify your partner to protect your business.
You can do this independently or with the help of various private companies, many of which offer such services for a fee. In this guide, we will focus on what you can do on your own.
Key Aspects of Verifying American Companies
The main challenge arises from the federal system in the United States, which complicates obtaining data about American companies. That is because each state maintains its business registries for legal entities, property, licenses, and more.
To initiate the verification process, you need to know not only the company`s name but also its registered address and identification number. This allows you to look for the legal entity in the business registers of a specific state.
You can typically find the necessary information about a business partner from the US on their business card, accompanying letter, or draft contract. These documents usually contain contact details like the legal entity name, registered address, email, and phone numbers. They may also include links to their website or social media profiles such as Twitter, Facebook, or LinkedIn.
In the US, legal entities tend to register in the state where they intend to conduct business. Expanding to other states for Americans can be complex and costly, so most opt to register their businesses in the state where they plan to operate and reside. Therefore, knowing the company`s registered address can help determine which state its owners (residents) live in, narrowing the search.
If the company`s registration location is unknown, we advise you to start the search by checking the business registry of Delaware. This small state has more than half of the nation`s registered legal entities. Additionally, states like Wyoming (known for its startup-friendly regulations) and Nevada (the state is famous for gambling and corporations) are also common choices for businesses.
Electronic Data Gathering, Analysis, and Retrieval (EDGAR) System
For public companies in the United States, you can utilize the EDGAR system, which allows you to access information about financial reports, documents, event reports, and plenty of other information related to public companies.
Access to the EDGAR system is free and open to the public. You can use the EDGAR search interface on the SEC website (https://www.sec.gov/edgar.shtml) to search for and download documents and information related to public companies.
It is a valuable resource for investors, analysts, and anyone interested in financial data and the activities of companies that trade on the stock exchange or issue securities for public access.
Secretary of State Website
Each American state has a Secretary of State website where you can find information about companies registered in that specific state. This registry includes details about company names, addresses, registration dates, and other particulars.
To locate this registry, you can use search queries such as New York Secretary of State business search or similar queries with the name of your particular state.
Nevada Secretary of State Business and so on.
Intellectual Property and License Verification
It is essential to check whether a U.S. company holds patents or other intellectual property objects. Information about such items is maintained on the USPTO website (U.S. Patent and Trademark Office).
You can also obtain information about a legal entity at the local licensing and permit issuance agency since, in the U.S., acquiring one of the mentioned permits is typically a prerequisite for conducting business.
If your counterparty is engaged in financial activities, information about them should be available on the National Multistate Licensing System website at www.nmlsconsumeraccess.org
Better Business Bureau (BBB)
The BBB is an independent organization that provides information about businesses and their reputation. You can use their website to check the ratings and reviews of a specific company.
Moreover, this resource allows you to assess companies not only in the US. but also in Canada and Mexico. It`s not just for checking; you can also apply for accreditation for your company to be listed among the 400,000 trusted businesses.
Dun & Bradstreet (D&B)
Dun & Bradstreet is a company that provides information about businesses and credit reports. They have an online registry where you can find information about various companies.
Additionally, this platform offers industry statistics and a catalog to examine key points from their industry reports. This will help you access information about emerging markets and understand trends and forecasts.
The U.S. Sanctions Lists
The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.
OFAC administers a number of different sanctions programs. The sanctions can be either comprehensive or selective, using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals. You can access the sanctions list here: https://sanctionssearch.ofac.treas.gov/
For instance, the International Trademark Registry provides general information about registered brands. This information typically includes the legal entity`s name, country and exact registration address, registrant`s name (often an attorney), identification number, brand`s activity type, and other details, depending on the company.
The Molfar platform offers a list of open foreign registries from around the world that is constantly updated. It includes registries for both individuals and legal entities, which you can filter by type and price for usage.
Searching and verifying a U.S. company in the United States is also effectively done through business directories. There are many of them, and here are a few of the most popular ones: Yelp, Manta, MerchantCircle, Yellow Pages, and more.
Read here how to check a Ukrainian company using open registries.