Every year, thousands of UK subcontractors and clients hand work — and money — to companies they know almost nothing about. The job goes wrong, the invoices go unpaid, and only then does anyone look at who they were really dealing with. The check that would have saved them takes about fifteen minutes. Here is how to do it properly.
1. Start with Companies House — it's free and it's official
Search the company on Companies House (or on CIX, which pulls the same data automatically). You are looking for five things:
- Company status. Active is the baseline. “Liquidation”, “administration” or “dissolved” ends the conversation. A status of “active — proposal to strike off” means the company has asked to be removed from the register: do not start work for it.
- Age. A company incorporated three months ago has no track record, no filed accounts and nothing to lose. That doesn't make it a fraud — everyone starts somewhere — but it means the usual checks can't tell you anything, so the risk sits entirely on you. Ask for payment terms that reflect that.
- Filing health. Overdue accounts or an overdue confirmation statement are small flags on their own, but they correlate strongly with companies in distress. A business that can't file a form on time often can't pay an invoice on time either.
- Charges and mortgages. A charge means a lender has security over the company's assets. One charge is normal. Several recent charges can mean the company is borrowing to stay afloat — and if it fails, the secured lender gets paid before you do.
- Previous names. A company that has changed its name recently deserves one extra question: why? Sometimes it's rebranding. Sometimes it's distancing from a reputation. Search the old name too.
2. Check the directors — not just the company
Companies fail; directors carry on. On the company's Companies House page, open the officers list and look at each current director:
- What else do they run? A director with six companies where four are dissolved and one is in liquidation is showing you a pattern. CIX draws this as a connection map on every report, including dissolved and liquidated companies.
- Have they been disqualified? The UK keeps a public register of disqualified directors. A current director cannot legally be disqualified — but people do breach disqualification orders, and past disqualification of someone now acting as a “consultant” to the company is a serious warning. CIX screens every current director against the register automatically.
3. Ask the trade — payment behaviour never lies
Accounts tell you where a company was a year ago. The trade tells you where it is now. Ask around: who has worked for them, and did the money arrive? The specific questions that matter:
- Do they pay certified invoices on time, or does 30 days become 90?
- Do they raise deductions and back-charges that were never agreed?
- Do they return retention when it falls due?
- Do variations get confirmed in writing before the work is done?
This is exactly the information CIX collects from contractors as structured, moderated reports — payment scores built from real invoice dates, behaviour scores from contract conduct, and hard flags like abandoned invoices. One search shows you what would otherwise take twenty phone calls.
4. Match the contract value to the company's size
A £15k-turnover company offering you a £400k package is a mismatch, whatever the explanation. Check the last filed accounts (even micro-entity accounts show net assets) and ask yourself whether this company could absorb one bad month without taking your money down with it.
5. Trust the pattern, not the promise
No single flag proves anything. A young company can be brilliant; an old one can be rotten. What you are looking for is a pattern: late filings plus a director trail of dissolved companies plus two subcontractors saying payment took ninety days. When the flags line up, believe them — before you price the job, not after.