Partnerships, deals, and investments can represent huge opportunities for your business. But, the bigger the opportunity, the bigger the risk and ramifications (both legal and ethical) for your company.
At CSBusinessScreen.com, we offer due diligence background check services that help companies better understand who they are partnering or working with, as well as where they are investing their funds and resources. But what is a due diligence background check? How is this type of check different than a traditional pre-employment background check? And under what circumstances is a due diligence background check a good idea?
Here’s a rundown of everything you need to know about a due diligence background check, as well as answers to these key questions.
When people hear the term “background check,” they often think of a company hiring a new employee. Pre-employment background checks may include criminal records, reference interviews, education verification, employment verification, and more. Pre-employment checks are also regulated by the Fair Credit Reporting Act, which creates certain limitations and rules around what companies can and cannot do.
Due diligence background checks are more intensive. They are typically conducted on business entities and their owners, officers, and key personnel as part of significant business transactions. For example, a firm may conduct an investment banking background check before funding a startup, or a publicly traded company might conduct a due diligence investigation before making a key acquisition. The goal of these due diligence background checks is to prevent fraud and to shield a company or individual from liability exposure.
Why would you or your business need to conduct a corporate due diligence background check? There are many possible reasons, including:
While the due diligence background check process is intensive and thorough, the information needed to get started is relatively limited. In fact, at CSBusinessScreen.com, we can start a due diligence background check with just the following information:
With that information, we can use proprietary tools and processes to provide accurate results and clear reporting. Our clients can then use that clear reporting to make important decisions around partnerships, business relationships, investments, and more.
During a due diligence background check, what would constitute a red flag? It’s best to break the answer to that question into two categories: 1) company-related red flags, and 2) individual-related red flags. For any given company, a business background check focuses on answering the following questions:
For any given individual (owner, officer, key manager), a company owner background check or company officer background check focuses on answering the following questions. Note that these questions closely reflect the same questions asked of companies:
Of course, an individual or company background check can ask any number of questions — this is just a sampling of the questions asked about companies and individuals. For any given due diligence background check, the questions asked (and the focus of the inquiry) can be tailored to the purpose of the check.
The questions listed above are wide-ranging, and answering them, accurately, and thoroughly demands specialization and expertise. At CSBusinessScreen.com, we work each day with businesses and individuals who are making important decisions about their companies and resources — decisions that demand a due diligence background check. Get in touch to learn more about how we can help you make business decisions with confidence.
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