As the latest umbrella company (Compusource) hits the buffers with contractor's money, I thought I'd remind people what 'due diligence' is all about.
It's all about checking that companies are what they say they are and that they are following the rules. The slight hiccup is that you need to know what those rules are.
Well here's the first one - you need to know who you are dealing with.
No, really.
You must be able to point to a person who owns or runs the company. The Director (or Directors) of that company. Or even know if it's a real company.
Was Compusource a real company?
The First Company Law Amendment Directive came in on 1 January 2007, and companies are required to put the following information on both their website and business emails:
In addition, the website also needs to include:
All of this information only needs to be on the website once and it doesn't need to be highly visible, so look in About us/Contact Us/Legal Information/T&C pages (or just google 'registered office site:companyname.com')
Why is this important? As the disgruntled Compusource contractors are discovering, you need to find a person responsible if the company suddenly refuses to answer its phone.
Why would a reputable company NOT give you this information?
Having a Limited company name helps to locate them (and the Directors) in Companies House. Without a Ltd Company you can't do that. There are a few Compsource's in Companies House and who's to say which (if any) is the right one?
Admittedly, looking the website up on WHOIS.net may help but in compusource.co.uk's case that domain is available!
So, before you sign on the dotted line with ANY company, at least make sure that it's a real company with real people that you can point solicitors at if it all goes belly up...
Finally, my advice is to think LONG AND HARD about a company that doesn't have this information on it's website.
For further information on what should be on a company website, look here: The UK's E-Commerce Regulations
Note: Search Nominet for uk websites (I forgot to do that...)
It's all about checking that companies are what they say they are and that they are following the rules. The slight hiccup is that you need to know what those rules are.
Well here's the first one - you need to know who you are dealing with.
No, really.
You must be able to point to a person who owns or runs the company. The Director (or Directors) of that company. Or even know if it's a real company.
Was Compusource a real company?
The First Company Law Amendment Directive came in on 1 January 2007, and companies are required to put the following information on both their website and business emails:
- the company registration number
- place of registration (such as England and Wales)
- registered office address.
In addition, the website also needs to include:
- The company name, postal address and company email address
- The name of any trade bodies or professional associations that the business is part of, including membership or registration details.
- The company VAT number, even if the website is not being used for e-commerce transactions.
- Any prices on the website must be clear and unambiguous.
All of this information only needs to be on the website once and it doesn't need to be highly visible, so look in About us/Contact Us/Legal Information/T&C pages (or just google 'registered office site:companyname.com')
Why is this important? As the disgruntled Compusource contractors are discovering, you need to find a person responsible if the company suddenly refuses to answer its phone.
Why would a reputable company NOT give you this information?
Having a Limited company name helps to locate them (and the Directors) in Companies House. Without a Ltd Company you can't do that. There are a few Compsource's in Companies House and who's to say which (if any) is the right one?
Admittedly, looking the website up on WHOIS.net may help but in compusource.co.uk's case that domain is available!
So, before you sign on the dotted line with ANY company, at least make sure that it's a real company with real people that you can point solicitors at if it all goes belly up...
Finally, my advice is to think LONG AND HARD about a company that doesn't have this information on it's website.
For further information on what should be on a company website, look here: The UK's E-Commerce Regulations
Note: Search Nominet for uk websites (I forgot to do that...)
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