Due Diligence Check of a Contractor

The statistics of commercial courts show that the number of claims from 2017 to 2021 has been growing inexorably. At the same time, most of the cases arising from economic disputes are related to collection of debts.

It is possible to prevent such disputes in various ways, and one of them is checking your counterparty.

Now there are many paid and free services on the Internet that allow you to check a counterparty. For example, on the official website of the Federal Tax Service there is a “Transparent Business” service, where you can instantly receive important information about the counterparty using the TIN of a company or an individual entrepreneur, such as:

-       its legal address. It is necessary in order to send legally significant messages to the counterparty, for example, certificates of works performed and claims. In addition, using the service, you can check whether other companies are registered at this address, which may indicate a mass registration and cause the company to be excluded from the Unified State Register of Legal Entities.

-       its general director, founders of the company. The signing of an agreement by an unauthorized person may result in non-performance. In addition, the service allows you to check if there is disqualification in relation to a management team member.

-       about published messages. All legally significant messages must be published in the journal "State Registration Bulletin". For example, about bankruptcy or about the upcoming expulsion of an inactive legal entity. This information can be decisive when entering into an agreement.

Services can provide a lot of other important information about financial statements, affiliations of companies and participants, but it is not always possible to quickly and correctly decipher and evaluate the information received.

That is why we recommend that when entering into medium and large contracts, always carry out a due diligence check of counterparties not only using open sources, but also using other databases.

TEAM offers contractors due diligence check services, and we not only collect information from open sources, but also work with closed databases, check the counterparty's judicial statistics, analyze and assess potential risks, and draw an opinion in a special report that will allow you to make a final decision about working with one or another party.

This step has many times already prevented litigation and bankruptcy of our clients!