What is company due diligence?

Company due diligence is the process of investigating a business before you extend credit, sign a contract, make an investment, or complete an acquisition. It covers financial health (accounts, assets, liabilities), governance (directors, shareholders, filing compliance), legal exposure (CCJs, gazette notices, charges), and behavioural patterns (filing trends, director history across other companies). The goal is to identify risks that are not visible from the company surface presentation.

What should company due diligence include?

At minimum: (a) Companies House status and filing history, (b) director search across all their other companies, (c) charges register (secured creditors), (d) gazette notices (insolvency proceedings, strike-off), (e) accounts analysis (net assets trend, going concern warnings, creditor levels), (f) CCJ check, (g) HMRC defaulter list, (h) PSC register (who ultimately controls the company). For acquisitions, add: asset verification, contractual review, and tax due diligence.

How much does company due diligence cost?

DIY Companies House and Gazette checks are free, but connecting records takes time. RecoupIQ Quick Check (£29) creates a source-linked decision brief for one company. The Forensic Report (£167) adds deeper history and network context where the evidence supports it. Acquisition work still needs legal, financial and tax advice appropriate to the deal.

When should I do company due diligence?

Before extending trade credit, before signing a supply contract, before making a deposit payment, before accepting a job at a new company, before acquiring a business, and periodically on existing customers and suppliers (annual review or continuous monitoring). The cost of checking is always less than the cost of discovering risk after you have already committed money or time.

What are red flags in company due diligence?

Major red flags: (a) accounts filed late or overdue, (b) confirmation statement overdue, (c) gazette notices (strike-off, winding-up petition), (d) director resignations in the last 12 months, (e) directors with multiple dissolved/liquidated companies, (f) negative net assets, (g) qualified audit opinion, (h) charges filed recently (new secured lending often precedes insolvency), (i) switch from full to micro-entity accounts (hiding detail), (j) registered office at a virtual address with no real presence.

Can I do company due diligence myself?

Partially. Companies House is free for basic filings and The Gazette is free to search. Connecting officers, filings, accounts, charges and public notices takes time and careful source checking. RecoupIQ assembles the available evidence and makes gaps explicit. It does not replace legal, accounting or credit judgement.

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Due Diligence

Company Due Diligence: What to Check Before You Commit Money

Whether you are extending trade credit, signing a contract, or buying a company outright, due diligence is the difference between a good decision and a six-figure loss. Here is exactly what to check and what the signals mean.

Anastassia Anufrieva / Unsplash

UK businesses write off £5.8 billion in bad debt every year (BACS/Pay.UK).

Most of it was avoidable. The warning signs were there. The company had late filings, declining net assets, director changes, or gazette notices. Nobody checked.

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Enter the company name or number. See status, filing compliance, director network, and risk signals in seconds.

The complete due diligence checklist

This is what professional credit managers check. RecoupIQ shows the public facts available for the company and offers deeper analysis where the source record supports it. You can also work through the checklist manually using the sources listed.

Company status

Is it Active, In Liquidation, Dissolved, or In Administration? Anything other than Active is a red flag. Also check for proposals to strike off (Companies House data).

Filing compliance

Are accounts and confirmation statement up to date? Late filing correlates strongly with insolvency within 12 months. Check the pattern: occasional lateness is different from serial non-compliance.

Accounts analysis (3-year trend)

Net assets: rising, stable, or declining? Creditors: growing faster than debtors? Going concern note in the audit? Switch from full to micro-entity accounts (hiding detail from creditors)? Qualified audit opinion?

Director network

Who are the directors? What other companies do they run? Have any of those companies been dissolved, liquidated, or entered administration? A director with 5 failed companies is a risk pattern, not bad luck.

Charges register

Fixed charges: specific assets pledged to lenders. Floating charges: ALL assets pledged. If the company is heavily charged, unsecured creditors (you) will recover nothing in a liquidation. New charges filed recently may indicate distress borrowing.

Gazette notices

Winding-up petitions, administration notices, proposals to strike off. Any gazette notice is serious. A winding-up petition means a creditor has already applied to the court to force the company into liquidation.

CCJ history

County Court Judgments indicate debts the company has failed to pay and a creditor has gone to court. Multiple unsatisfied CCJs means the company is not paying its bills (TrustOnline, £6 per search).

HMRC defaulter list

HMRC publishes deliberate tax defaulters. If the company or its directors appear, there may be outstanding tax liabilities or a pattern of non-compliance (gov.uk, free).

PSC register (ultimate ownership)

Who ultimately controls this company? Persons with Significant Control (PSC) must be declared. Complex structures with offshore holding companies can obscure the real owners. Check for frequent PSC changes.

Phoenix pattern analysis

Has a director previously dissolved a company doing the same trade and started a new one? This is the hardest check to do manually because it requires mapping across all the director's companies over time. RecoupIQ does this automatically.

Two people shaking hands in a business setting — Cytonn Photography / Unsplash

Who needs company due diligence

Trade creditors

Before extending credit terms (30, 60, 90 days). The cost of a bad debt dwarfs the cost of a check.

Procurement teams

Before appointing suppliers on critical contracts. A supplier failing mid-project costs far more than the contract value.

Acquisition buyers

Before signing a share purchase agreement. Hidden liabilities become your liabilities the moment you complete.

Job candidates

Before accepting a role at a company you do not know well. Your salary is your credit exposure to that company.

Ongoing due diligence (monitoring)

A company can pass due diligence today and deteriorate in 6 months. The best practice is continuous monitoring: automated alerts when anything changes.

RecoupIQ Monitoring (from £19.99/mo)

Add companies to your watchlist. Get alerted within 24 hours of: gazette notices, director changes, new charges, status changes, late filings. Never discover a problem after it has already cost you money.

Available via the web dashboard or the Microsoft 365 Trust Check app (per-seat for your team). RecoupIQ is a Microsoft partner.

See monitoring plans

Choose the depth that matches the decision.

A RecoupIQ Forensic Report adds deeper history, prioritisation and source-linked context to the public record where supported. It is designed for material decisions. Start with a Quick Check (£29) when you need a focused view of one company.

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Last reviewed: July 2026. General information for UK companies. Not legal or financial advice. RecoupIQ Ltd, Company No. 16947526, ICO ZC077511. Microsoft Partner.