How do I check if a company is legitimate before doing business with them?
Verify the business registration in an official company database, check for a physical address and working phone number, and look for independent reviews before signing a contract or sending money.
Last reviewed: 10 June 2026
Explanation
With company formation available online for under $100, a convincing business front is easy to set up. Before entering any significant contract, paying a deposit, or sharing sensitive business information, spend a few minutes verifying the company's legal existence and track record.
In the United States, search the state's Secretary of State business registry (each state has one) using the company's full legal name. Confirm the business is in good standing and note how long it has been registered. In the UK, use Companies House (companieshouse.gov.uk). In many countries, you can also search for the company's VAT number in tax authority databases. If a company claiming to be 10 years old was registered last month, that is a serious discrepancy.
Next, verify the physical address. Street-level photos from a mapping tool can reveal whether an address is a real office building, a residential house, a virtual-office service, or a fictional location. Call the published phone number during business hours and assess whether you reach a real person or a professional-sounding setup. Check LinkedIn for genuine employees with work histories at the company — a company with no verifiable employees is suspicious.
Read independent reviews on Google Maps, Trustpilot, and the BBB. Pay particular attention to negative reviews that describe very similar experiences — a pattern of identical complaints is more telling than one bad outlier. Also search the owner's name or principals in court records via PACER (US) or your country's equivalent to check for fraud judgements or bankruptcy history.
Common red flags
- Company registered in the past few months claiming years of experience
- Physical address resolves to a virtual office service or does not exist
- No LinkedIn presence or employees with verifiable work history at the company
- Identical complaints on multiple review platforms about non-delivery or disappearing funds
- Requests full payment upfront without any industry-standard contract protections
- Principal's name appears in court records related to fraud or repeated business failures
What to do now
- Search the company name in your state's Secretary of State or national company registry
- Verify the physical address on a mapping tool and call the listed phone number
- Check Trustpilot, BBB, and Google Maps reviews and look for patterns in negative feedback
- Search the owner's name combined with the word 'lawsuit' or 'fraud' in a search engine
- For large contracts, consider a commercial credit check (Dun and Bradstreet, Experian Business)
- Require a signed contract before transferring any funds
Frequently asked questions
Is a company being incorporated enough to show it is legitimate?
No. Incorporation is easy and cheap. Many fraudulent companies are properly registered. Incorporation confirms legal existence but says nothing about honesty, financial health, or track record. Combine it with reviews, address checks, and principal background research.
What is a virtual office and why is it a red flag?
A virtual office is a shared mailing address that makes a company appear to have a physical presence in a prestigious location. While some legitimate remote businesses use them, scam companies use them to appear local when they are not. Look for evidence of genuine operations at the location.