A good way to prevent a business relationship going sour (through late payment, or failure to supply goods, for example) is to check out the other business’ track record first, including whether they’ve been in trouble with the law. Here’s how.

By Declan Gilroy, KSB Law LLP

For some time now it has been possible to check for outstanding County Court judgments before entering agreements.

However, information has previously been considerably limited and it is only since 6 April 2006 that the register has been increased to include sections relating to both High Court judgments and fines imposed by either Magistrates or Crown Courts. 

A search of the register can be made by a variety of means, namely:

1.    On line at info@registry-trust.org.uk, or
2.    By DX to DX No.137592 Euston 4; or
3.    By post to Registry Trust Limited, 173-175 Cleveland Street, London W1T 6QR.

The fee for searching one section of the register is £8 but there is a slight discount if three sections are searched and then the fee is £20. The registry is open from 10am to 4pm, Monday to Friday and their telephone number is 020 7380 0133.

A search may be made against a named individual at a specified address, or against an individual using a trading style at a specified address, or against a limited company. Registry Trust Limited also maintains registers for the Isle of Man, Jersey, Northern Ireland, Scotland and the Republic of Ireland.

You would be well advised to consider using the registry before entering into any agreement or guarantee either with a limited company or an individual or partnership. 

With regards to a limited company, not only should information be sought as regards the potential client but also searches should be carried out in respect of any prospective guarantors.

Such searches should be combined with searches at the Land Registry in respect of any individual prospective client or proposed guarantor. It’s surprising how frequently it is that in a husband and wife team situation the husband offers his guarantee yet the property is registered in the wife’s sole name. 

A search at the Land Registry prior to executing the agreement or guarantee should help you in two ways. Firstly, it will put you on notice that the prospective guarantor may already be trying to mislead or hoodwink you, and secondly, to ensure that any guarantee that is taken is from somebody who at least owns some property and hopefully has some equity to satisfy any claim upon him or her.

A further simple precaution to take before entering into any agreement or guarantee is to carry out a search to see whether or not there is any individual voluntary arrangement (IVA) or bankruptcy order against a prospective individual client or guarantor. 

This can be done on line at www.insolvency.gov.uk.  Click on “Bankruptcy/IVA Search”.  You can search by “Name” or by “Trading Name”.  There is no fee.

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By Declan Gilroy  on   Jul 13,2008

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Keywords

business partners    suppliers    customers    legal checks    legal search   

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