The Business Register is the foundation for safe and responsible business

This is striking, as 1 in 6 business owners has, at some point, found out after making a private purchase that a business did not actually exist. A check in the Business Register could have prevented this type of fraud in many cases.

Marije Hovestad, manager director of Data Provision at KVK, sees failing to carry out a check in the Business Register as a missed opportunity. For private use, but also, and particularly, for business purposes. ‘The Business Register is the official register of all businesses in the Netherlands’, explains Hovestad. ‘You can use it to check whether a business actually exists, when it was established, what its legal structure is, and who is authorised to sign on behalf of the business. This makes the Business Register the foundation for safe and responsible business practices.’

When trust is not enough

Entrepreneurs who spot opportunities and act quickly often go far. However, with digitalisation, online commerce, and new forms of fraud, verifying information is becoming increasingly important. Business is conducted faster and more often remotely, whilst online information is by no means always reliable. Think of business contacts that turn out not to exist, identity fraud, someone signing on behalf of a business without being authorised to do so, or a business that appears to be active but is in fact already bankrupt.

Hovestad: ‘Suppose someone poses as a (managing) director of a business and signs a contract for supplies or, for example, a lease car. Without prior verification, it is difficult to tell whether that person is actually authorised to do so on behalf of the business. That is why it is wise to always check the Business Register before entering into an agreement.’

In such situations, a business owner is often in a weak legal position. A signature from someone without signing authority does not automatically oblige a business to honour those agreements. And if a business no longer exists or is no longer active, there is often little that can be done.

From trust to verifiable certainty

When dealing with a new customer or supplier, business owners often start by searching online for reviews and ratings. But in doing so, they are essentially swapping one form of blind trust for another. Reviews are not always genuine, say nothing about whether a business is insolvent, and offer no certainty as to who has signing authority. According to Hovestad, the Business Register offers something different: verifiable information.

‘A review is a customer’s experience’, she says. ‘The Business Register contains officially registered company information that businesses are legally obliged to provide. That goes far beyond an online opinion.’

Now that entrepreneurs are conducting business digitally at an ever-increasing pace, verification is becoming more important. Trust remains indispensable in business, but blind trust carries ever-greater risks.

A routine check

A check takes very little time. You can find a business on kvk.nl using its trading name or KVK number. Business owners can then verify whether the details match what a business contact tells them: is the address correct, do the business activities fit the story, and are you speaking to the right person?

Checking business addresses can be very revealing, says Hovestad. ‘If a car garage turns out to be located on the 8th floor, that could be a reason to look further. Does the location fit with the activities a business claims to carry out?’

According to Hovestad, the first step in responsible business practice should therefore always be to check the Business Register. ‘If a business isn’t listed there, something isn’t right. But even if it is listed, it’s important to check whether the details match what someone claims.’

KVK has no enforcement role in this regard. ‘We are not an investigative body’, emphasises Hovestad. ‘What we do is provide transparency via the Business Register and share risk indicators with investigative authorities.’

Avoid an expensive lesson

It is impossible to run a business without trust. But in an age when a business can be set up in three clicks and disappear in two, the question is not whether you trust, but on what basis. Due diligence is now an integral part of professional business practice. That quick check can make the difference between a good deal and an expensive lesson.