Compliance is an integral aspect for every law firm but it appears that many are still taking huge risks when obtaining company information.
Whether working as part of a UK or International company mergers & acquisitions team or dealing with commercial property deals, it is imperative that company checks are carried out before any transaction takes place. This ensures that the information on these companies is clearly available for analysis and the parties involved are fully aware of its past and current position.
When merging or acquiring a company it’s paramount that all aspects relating to that business are known. If something concerning was identified, it at least allows the other party to consider their options before fully committing to the transaction. But what if the company information obtained was not 100% accurate or was in fact incomplete, meaning it did not give the full picture? This is a question that all law firms should ask themselves when obtaining company information.
There are a lot of websites that offer company information, whether it be for UK based or international companies, available for free online free. Many law firms, small or large, are frequently using these sources to obtain the data that they require but can they be trusted?
It is often unclear what the source of this information is and when it was lasted updated. A common practice is to scrape other websites and present this data as their own This can often result in the same information being reused by different vendors but what happens if this data is wrong?
A major downside of using free online data is that there is no accountability. So, if this data was inaccurate and/or incomplete with the transaction taking place based on this information, who would be liable if the inevitable occurred? The answer is likely to lie with the law firm itself, meaning that they could be questioned as to whether due diligence was fully exercised.
Therefore, in order for law firms to protect themselves, they should look to acquire their information from credible sources that have an adequate indemnity policy in place.
UK and International company information should always be sought from a reputable supplier who is transparent regarding the source of the data and who offers an adequate insurance policy in the unlikely event that any omissions and/or errors are found in the search.
Our UK Company searches are sourced from both Companies House Direct (CHD) and Companies House Service (CHS). Documents obtained exclusively from CHS will be explicitly detailed as such, ensuring that law firms are aware of data origin.
With our International Company searches, we are able to obtain the most reliable, up to date information, always retrieving documents directly from the registry where possible. If we are unable to source the documents directly from registry then we usually contact one of our global network of Company Information Agents to obtain the information on our behalf. However, we always inform our clients when third party agents are involved.
All our searches are backed up by our £10 million indemnity insurance policy, meaning you can have peace of mind that your compliance obligations will be met.
For more information or to start ordering company searches call 0800 197 1757 or contact us here