Is your business relation trustworthy? Do these checks

You can find a wealth of information about businesses and organisations in the KVK Business Register. You can check who runs a business, where it is based, and whether it has gone into administration. And there are other ways to assess whether a business partner is trustworthy. For example, look at quality marks and reviews.

You can do business more safely and avoid unpleasant surprises with these 6 checks.

1. Is my business relation registered with KVK?

Does the company you want to do business with exist? If so, it will be registered with KVK. Search the Business Register for the business name or KVK number of your prospective business relation. You will also find other current information, such as address, business activities and number of employees. Check if these match the information you have been given.

2. Does the information in the Business Register match?

There are fake companies active online. So pay attention when doing business with a company for the first time. Are the company details correct? Are the registered business activities the same as the products and services the company offers?

For example,  an internet seller shows images of large warehouses with all kinds of products. But you see in the Business Register that the address is a residential apartment and the business has other activities. That does not match. In such cases, be extra careful and, for example, look online for reviews from other customers. It could be that you are dealing with someone who is using another person’s business details to defraud people. This is business identity fraud.

Under investigation

If KVK receives a signal that information in the Business Register is incorrect, we may start an investigation. From then on, you will see the message 'under investigation' next to the registration. That does not always mean there is something seriously wrong with a company. Sometimes, for example, an address is no longer correct, or a director has been incorrectly registered or deregistered.

3. Who is authorised to sign?

Are you entering into a contract ? Check whether the name and KVK number in the contract are the same as in the Business Register. Also check whether your business contact is authorised to sign contracts.

Is this person authorised to sign?

People who are authorised to sign are allowed to perform certain tasks on behalf of a company, such as signing contracts, making purchases, or dispatching deliveries. Who is authorised to sign depends on the legal structure of the company. On the extract, you can see the names of those who are authorised to sign.

A person can have full or limited authority to sign. Sometimes, for example, a person may only sign contracts up to a certain amount, or only make agreements together with another official or director.

If the person who signed is not authorised, problems may arise over delivery or payment. In such a case, your business relation does not have to abide by the agreement, as it will not be valid.

4. What is the business’s financial situation?

Larger businesses that are not listed on the stock exchange are required by law to file their financial statements with KVK. These financial statements are public. So you can use them to find information about a business’s financial situation. For example:

• How has the business performed financially?
• Can the business repay loans and interest on time?

Also check the following in the Business Register:

• Is the business bankrupt?
• Has the business been granted a suspension of payments?
• Is the business owner undergoing debt restructuring?

With this information, you can assess whether your business relation has enough money to honour your agreements. Annual reports of listed companies can be viewed online at the Dutch Authority for the Financial Markets (AFM) . If a business fails to file financial statements, despite being obliged to do so, this is a reason to be extra vigilant.

There are also specialist agencies that investigate businesses’ financial health. You can pay for a credit report from such an agency containing financial information about a business.

5. What do others say about the business?

Apart from the information in the Business Register, there are other things that indicate how reliable a business is. For example, what experiences have others had with the business? Search online for customer reviews. Reviews aren’t always reliable, but they do give an idea. And how professionally does a business respond to negative reviews?

Perhaps you know people yourself who have had dealings with the business before. If you cannot find much information, ask the business for details. Or see if you can visit for a personal introduction. This will also give you a better idea of how they operate.

6. Is the business a member of a sector organisation?

Sector organisations usually check the quality of businesses that join. They often also have a  quality mark or complaints desk. If your prospective business partner is a member of a sector organisation, you know that they meet certain quality standards. Read more about this on the sector organisation’s website.