Checking a company: what a full Due Diligence should include

Identification and registration status

A check begins not with a search for damaging material but with a dull question: is this the right legal entity. An error at this step devalues all the work that follows - it is possible to check a company faultlessly and find it has nothing to do with your transaction.

There is only one reliable identifier: the registration number together with the jurisdiction. Not the name, not the brand in a presentation, not the address of the office where the negotiations took place. Groups use a single commercial name for dozens of legal entities in different countries, and the entity with which you sign the contract may share nothing with the brand you know but the name. The number and the jurisdiction are taken from the draft contract and checked in the national register of the country of registration, not in an aggregator reselling an extract of unknown currency.

In the European Union the national commercial registers are linked by a common company search system: it makes it possible to find a record and to see what volume of information a particular country discloses. That volume varies - in some places full accounts and the list of shareholders are published, in others only the fact of registration and the address. This is not a shortcoming of the check but a property of the jurisdiction, which is recorded in the report as a limitation.

The second question at this level is status as at a date. A register record describes the past: months pass between the entry of information and your transaction, and in a number of countries changes are reported with a lawful delay. The company may have entered liquidation, changed its form or been struck off the register. The currency of an extract on the day of signing matters more than its content.

The third is the history of names. A change of name or legal form is lawful and common, but it breaks the search history: events tied to the former name cease to be found under the new one. Both versions must be checked, otherwise a court episode from three years ago will simply not appear in the results.

Граница вывода. A registration record confirms the existence and status of a legal entity as at the date of the record. It confirms neither solvency, nor the presence of resources, nor that the negotiations were conducted by people connected with this company.

Ownership structure and beneficial owners

The international standard proceeds from the premise that behind any legal entity stands a natural person who ultimately owns or controls it. In 2022 FATF tightened Recommendation 24, requiring countries to ensure that competent authorities have access to adequate, accurate and up-to-date information on beneficial owners, and in 2023 it issued guidance on its application and extended comparable requirements to trusts and other legal arrangements through Recommendation 25.

The practical consequence for a check is this: the requirement to disclose the beneficial owner exists almost everywhere, but the means of access to that information differ radically. In some places a public register operates, in others access is granted to authorised persons on a substantiated request, in others the obligation to keep the data up to date rests with the company itself. The absence of a record of a beneficial owner therefore does not mean that there is no beneficial owner. It means that the information is not disclosed in that source, and the question moves from documentary confirmation to reconstruction.

The formal structure and actual control do not always coincide. Between them stand nominee holders, trusts, shareholders' agreements, pledges of shares, options and powers of attorney with wide authority. A person may hold no shares at all and yet determine every material decision. The reverse is also true: a person named in the register may be a bona fide holder with no real influence.

Reconstructing control means working with indirect indicators, and the result carries different weight than a register extract. Matching addresses, overlapping directors between related companies, recurring representatives, the sequence of corporate changes, public statements about the ownership of a business - all of this is lawfully collected from open sources. But a conclusion drawn from them remains a conclusion. The wording "the structure shows indications of control by a particular person" and the wording "a particular person is the beneficial owner" are different statements with different consequences.

The difference is not legal caution for the sake of caution. It determines what can be done next. A confirmed fact forms the basis of a claim. A supported conclusion forms the basis of a negotiating position and of protective contractual terms. A hypothesis is good only for deciding where to direct further checks.

Граница вывода. The absence of information about a beneficial owner is not an indication of wrongdoing. A complex international structure does not in itself prove either concealment or an unlawful purpose: it means that establishing control requires additional work and that some conclusions will remain probabilistic.

Directors and corporate authority

A contract is signed not by a company but by a person. The question addressed at this level is literal: did the particular signatory have the right to create an obligation of that size, and what happens if they did not.

Three things are checked. First - the current composition of the management bodies and the date of their appointment: registers disclose directors and their powers to varying degrees, but the fact of appointment is usually available. Second - limitations on authority. The articles of association or a members' resolution may provide that transactions above a certain amount require approval, that signing is joint, or that certain types of obligation fall outside the competence of the sole executive body. Third - if a representative signs, the basis for it: the power of attorney, its term, its scope and who issued it.

The history of appointments is checked separately. Rapid changes of management before a transaction, the appointment of a director shortly before negotiations, the involvement of the same person in dozens of unrelated companies - none of this is a violation, but each such circumstance changes the questions that need to be asked. Mass directorship occurs with professional corporate service providers and is lawful in itself; what matters is whether the signatory's role corresponds to the scale of the obligation.

The practical value of this level is that it is the only one that produces a direct contractual consequence. If authority is not fully confirmed, the risk is closed not by abandoning the transaction but by a term: attaching a members' resolution, a warranty as to authority, a second signature, or an obligation to provide a current extract as at the date of signing.

Граница вывода. Confirmation of authority as at the date of the check does not guarantee that it remains in place as at the date of signing. A director's involvement in other companies is grounds for a question, not evidence of bad faith.

Licences, activity and resources

This level answers the question of whether the company exists not only in the register but in the economy. Registration is permission to exist, not confirmation of the ability to perform an obligation.

The check moves from what is stated to what is observable. A company states its production capacity, headcount, delivery geography and experience. Observable indicators are a different set: addresses and the nature of the sites, traces of hiring, licences and permits where the activity is licensed, the public record of actual projects, industry mentions, participation in procurement, the profile of counterparties. Agreement between these two sets does not prove reliability, but a discrepancy between them is the most frequent practical outcome of a check.

Particular attention is paid to licences. Where an activity is subject to licensing, the existence of a valid licence is checked in the register of the competent authority, not against a copy sent by the counterparty. The term, the scope of permitted activity and the absence of suspension are checked. A copy of a document confirms only that the document existed at the moment the copy was made.

A separate indicator is proportionality. A company with two employees and no warehouses of its own may lawfully conduct large-scale trading activity through subcontracting and leasing. The problem arises when the declared model requires resources of which no source shows any trace, and when an explanation for this appears only after a direct question.

Граница вывода. The observable indicators describe the position as at the date of the check and within the limits of the public trace. The absence of public activity does not prove the absence of activity: closed markets and a subcontracting model leave few traces.

Financial indicators and liabilities

The financial level of a check is often confused with an audit. These are different tasks. An audit confirms the reliability of financial statements under an established procedure and is carried out by an authorised person with access to primary documents. A check works with externally available indicators and answers a question about risks, not about the reliability of accounting.

What is available: published financial statements where disclosure is mandatory, information on pledges and security in the relevant registers, enforcement proceedings, tax and social security arrears in those countries where such data is open, publications about financing and transactions. This set produces not a valuation of the business but a picture of obligations: what the company is already bound by and what limits its freedom to dispose of assets.

The practical significance of this level is underestimated. Security granted in favour of a bank, covenants restricting distribution of profit, a pledge over a share in an operating company - none of this constitutes a breach, but all of it determines what will actually happen if an obligation to you is not performed. A creditor with a registered pledge will rank ahead of you regardless of how convincingly negotiations with you were conducted.

The warning sign at this level is not a loss but a gap between the declared scale and the disclosed financial statements, particularly where statements have not been published for several consecutive periods despite an obligation to do so. Non-disclosure in itself may be explained by an exemption for small companies, but combined with a declared large turnover it calls for a direct question.

Граница вывода. This is an analytical assessment of indicators, not an accounting audit and not an opinion on solvency. The absence of negative financial records does not confirm the availability of funds to perform your obligation.

Disputes, insolvency and regulatory decisions

A company's litigation history is read not as a list of cases but as the conduct of a party in conflict. A single dispute with a consumer and a series of identical claims from suppliers for non-payment are different signals, although in a report both will appear as a line in a table.

What is examined is the role in the proceedings, the subject of the claim, its recurrence and the trend. A company that is defendant in a dozen debt recovery claims over two years yields a practical conclusion: obligations to counterparties are performed late and through the courts. A company that is claimant in business reputation disputes presents a different profile. Neither is proof of bad faith towards you, but both change the terms on which it is reasonable to work with it.

A separate layer is insolvency proceedings. Not only current proceedings are checked but also the history: the involvement of connected companies within the perimeter in insolvencies, the challenging of a debtor's transactions, and the holding of controlling persons subsidiarily liable where such information is public. In the EU, information on insolvency proceedings is available through interconnected national registers, but the depth and format of disclosure depend on the country.

Regulatory decisions are the third layer: orders, licence suspensions, fines imposed by sector regulators. Precision of wording matters here. The existence of an order is confirmed by an official document; the interpretation of what that order means for your transaction is already a conclusion, and it must be marked as a conclusion.

Граница вывода. A publication is not the same as an established fact, and a claim is not the same as guilt: court proceedings reflect the existence of a dispute, not its outcome. Closed and unpublished proceedings cannot be accessed by lawful means and are recorded as a gap.

Sanctions, PEP and geographic risks

A sanctions check is the only level where an error carries direct legal consequences for you, not merely commercial ones. Discipline in identification therefore matters most here.

The check runs against official lists and against consolidated resources maintained by the regulators themselves: the European Commission publishes an overview of sanctions regimes and related search tools. It covers not only the company itself, but also shareholders, directors and, where applicable, ultimate beneficial owners, since restrictions may extend to persons controlled by a listed person.

A name match is not identification. Namesakes, transliteration and different name-recording systems produce false positives constantly. A match is verified against date of birth, jurisdiction, role and other available identifiers, and the result is stated unambiguously: the match is confirmed, excluded, or requires further data. The legal qualification of the consequences is given by a lawyer working with the specific regime.

PEP status - a politically exposed person - works differently. It is neither a sanction nor an accusation. It indicates a heightened level of attention: the requirements for verifying the source of funds and the nature of the relationship are higher in such a situation. The conclusion "the participant is a public official" and the conclusion "the participant is involved in corruption" are different statements, and the second does not appear in the report without documentary grounds.

Geographic risk is not an assessment of countries but an applied parameter: availability of data, applicable regimes, requirements of the intermediary bank. A jurisdiction with limited disclosure does not make a counterparty suspicious. It means that some questions will remain without a documented answer, and this has to be reflected in the terms of the transaction.

Граница вывода. A list match is not a conclusion until the person has been identified. PEP status does not mean a violation and is not in itself grounds for refusal. The legal assessment of sanctions consequences is given by a specialist lawyer, not by an analyst.

The transaction, the payment and the resulting risk map

The final level differs from the previous ones: it looks not at the company but at the specific transaction. The same company may be an acceptable counterparty on payment after delivery and an unacceptable one on one hundred per cent prepayment.

Three things are checked. The first is the correspondence of the parties: the person in the contract, the person in the invoice and the holder of the bank account must be the same. A discrepancy is almost always explained convincingly - the internal structure of the group, bank requirements, tax reasons. The explanation may be honest, but the legal consequences do not depend on its honesty: you will bring your claim against the party to the contract, while the money will go to the payee. The second is the payment route: the jurisdiction of the bank, intermediaries, the consistency of the route with the stated business model. The third is security and protective provisions.

The outcome of the whole check is not a list of facts but a risk map tied to the decision. Each material conclusion is assigned a level of confirmation, and each open point a statement of what would close it: a document from the counterparty, a contractual provision, a change in the payment arrangements, or withdrawal from the transaction. A check that ends with a list of information without such a link leaves all the work of interpretation to the client.

This is also where what most often determines the value of the work is set out: the list of questions to be put to the other side before signing. This is not a claim and not an accusation. It is a way of obtaining documentary confirmation from the counterparty where external sources do not provide it.

Граница вывода. The risk map describes the position as at the date of the check and does not guarantee performance of the obligation. It allocates risk between the parties but does not remove it.

What a professional process looks like

The order of work matters more than the set of sources. A check that begins with data collection produces volume; a check that begins with a question produces an answer.

The first step is a written statement of the task: what decision is being taken, by what date, what amount is involved and what happens in the event of non-performance. The second is a check of admissibility: the legal basis for the interest, applicable restrictions on data processing, the absence of a conflict of interest on the part of the provider itself. The third is agreement on scope: which jurisdictions, what depth, which lines of enquiry are closed in those countries from the outset. It is at this step that an honest provider says what it will not be able to do.

The next stage is collection: registers and official disclosures, court and regulatory materials, sanctions lists, the public record of activity, documents provided by the client. Each source is recorded with the date it was accessed - without this, a month later it is impossible to tell whether a conclusion is out of date.

Then comes verification. Material conclusions are checked against a second independent source. If there is no second source, the status of the conclusion is downgraded explicitly rather than passed over in silence. Contradictions between sources are not smoothed over: a discrepancy between a party's account and an external record is itself a result.

The final stage is assembling the risk map and holding a working session with the client or the client's lawyers. The session covers not only what has been established, but also what remains unverified and which questions are worth putting to the counterparty directly.

Граница вывода. Following the process does not guarantee a complete picture: some information is in principle unavailable by lawful means. What the process does guarantee is that what is unavailable will be named rather than filled in with supposition.

What the client receives as a result

The material produced by a check must be usable for a decision by someone who took no part in gathering the data. That places requirements on form, not only on content.

First, a one-page summary: what has been established, what was not confirmed, where gaps remain and which questions require a lawyer's decision. This is the part read by the executive taking the decision.

Second, the structural part: the company profile, the ownership chart with a level of confirmation for each link, the directors and their powers, a map of connected companies, a chronology of material corporate changes.

Third, the layer of circumstances: financial indicators, court and regulatory episodes, sanctions and PEP results, a reputational profile separating what is confirmed from what is not.

Fourth, the record part, without which the report loses its value within a month: a log of sources with the dates accessed, a list of discrepancies between what is claimed and what is confirmed, a list of open points and recommendations on what would close each of them.

Граница вывода. The report is not a legal opinion and does not replace the client's decision. It describes the position as at the date of the check and becomes out of date as corporate changes occur.

Limitations and the lawfulness of methods

A company check works with official registers, court and regulatory materials, disclosures, public information and documents lawfully provided by the client. This is sufficient for most practical tasks and plainly insufficient to promise a complete picture.

What a check does not do. It does not obtain access to banking secrecy or closed state systems. It does not collect personal data without a legal basis and does not carry out surveillance of individuals. It does not request information from third parties under a false pretext. It does not circumvent disclosure restrictions set by a jurisdiction.

What a check does not guarantee. It does not predict a counterparty's conduct: a company acting in good faith may fail to perform an obligation because of circumstances that did not exist at the date of the check. It does not prove a breach: there are procedural mechanisms for that. It does not guarantee approval by a bank or a regulator, which have their own procedures and their own sources.

And the main limitation, which is worth stating before work begins: a significant part of the conclusions in a cross-border check is probabilistic, because jurisdictions disclose different volumes of information. An honest report differs from a polished one in that it shows exactly which points remain probabilistic.

Граница вывода. The legal characterisation of any circumstances - sanctions, tax, corporate - is given by a specialist adviser in the relevant jurisdiction.

What to prepare for the initial assessment

• The exact name, registration number and jurisdiction of the company - from the draft contract, not from a presentation or a letter.
• The decision you are taking: prepayment, deferred payment, acquiring an equity stake, long-term partnership - and for what amount.
• The countries connected with the transaction: the counterparty's registration, the place of performance, the jurisdiction of settlements.
• The deadline by which an answer is needed.
• What you have already checked yourself and from which sources - so that you do not pay for work to be repeated.
• What exactly gives rise to doubt: a specific question works better than a request to "check everything".

Documents, extracts and correspondence are not needed at the initial assessment stage. What is listed above is enough for us to say what can realistically be checked in your case, within what time frame, and what will remain unavailable.

Frequently asked questions

• 01

  How does screening differ from a full check?

  Screening is an automated comparison of a company and connected persons against lists and databases: registry status, sanctions matches, obvious adverse records. It is fast, inexpensive and answers the question "are there any obvious obstacles". A full check adds what cannot be obtained by querying a database: reconstruction of control, comparison of stated resources with observable ones, analysis of conduct in disputes, verification of the signatory's authority, and the linking of conclusions to the terms of the specific transaction.

• 02

  How much does a full company check cost and how long does it take?

• 03

  Can the ultimate beneficial owner always be identified?

• 04

  What should be done if the counterparty has a complex international structure?

• 05

  Are foreign companies checked?

• 06

  What should be done about an adverse publication concerning a company?

• 07

  How quickly do the results of a check become outdated?

• 08

  Does a check replace legal review of the contract?

What follows from this

A full check differs from screening not in the length of the report but in the fact that the origin of every statement is visible in it. The eight levels - from identification to transaction terms - are arranged so that each subsequent level rests on the previous one and is less amenable to documentary confirmation.

The practical sense of this discipline is simple. A decision is taken not on the basis that a report exists, but on the basis of how many points in it remain open and how exactly you close them: with a document from the counterparty, a contract term, a change to the payment arrangements, or by declining the transaction.

If the task is already defined and there is a deadline, it makes sense to start with an initial assessment: what can actually be checked in your situation, within what time frame, and what will remain unavailable.

Sources

• FATF - Beneficial Ownership: Recommendations 24 and 25, guidance on applicationпроверено 6 августа 2026

  The international standard for disclosure of beneficial ownership

• European e-Justice - Company search in EU member state registersпроверено 6 августа 2026

  The scope of disclosure in national commercial registers

• European Commission - Overview of EU sanctions regimes and related resourcesпроверено 6 августа 2026

  Official sanctions lists and screening tools

• Directive (EU) 2015/849 on the prevention of the use of the financial system for money launderingпроверено 6 августа 2026

  Requirements for beneficial ownership information under EU law

The links lead to official materials. The applicability of the rules depends on the jurisdiction: before relying on them in a particular country, local regulation must be checked.

Связанные материалы

• 01 /ServiceDue Diligence on companies and beneficial owners→
• 02 /CaseA hidden beneficial owner in an offshore structure→
• 03 /ArticleHow a company's actual beneficial owner is established→
• 04 /ArticleWhen a standard check is not enough and Enhanced Due Diligence is required→
• 05 /ArticleHow to check a counterparty before a deal→