Wednesday, 20 July 2011

It's a bit like being a detective - those pesky requests for foreign company information...

If there is one thing that I get asked to do very regularly, it's to find out as much as I can about a particular company, or indeed group of companies. Simple enough, you might think? Ah, if only! The problem that we always encounter is where a company is not based in the UK: unless it's a pretty big operation, the chances of finding out anything authoritative can be very slim indeed. The main reason for this is that filing requirements differ drastically from one country to another - and just to complicate things even more, in the USA, the requirements vary from state to state.

Please note that this is by no means an authoritative guide to looking for company information - this is just to give you an idea of the kind of things we often do when we are asked for this kind of info. Every law library has its own methods/resources/preferences in terms of procedure.

One thing to bear in mind from the outset - whether it's the UK or USA, make sure you establish the correct company name. If you are looking at one little company that's part of a big group of other little companies, they can all have very similar names. Make sure you are looking at the correct entity, and not just a company with a name that's almost the same as the one you were given.

Anyone who does this kind of research regularly will know that in the UK, we are quite lucky when it comes to being able to obtain basic information on a company, because generally speaking, (and I am being VERY GENERAL here -  if it's a partnership for example, there will  be less available - but we won't go into that now!) we can pay for and download a number of documents from Companies House. So if the company has been alive long enough to have filed a set of accounts and an annual return, we can obtain these documents, which give us information like who the company directors and shareholders are, for example. If the company is only recently incorporated then there won't be any of these documents available, but there will be the set of incorporation documents, which will show the directors at the time of incorporation - which is a start at least!

If we're looking at non-UK companies from the outset, then we will often check and see if it is possible to obtain any information free or at cost from the company registry of that country/US state. We also have access to a number of subscription company information databases which we can go to and see if the company is on there. These databases pull their information from a number of sources - sometimes local registry filings, sometimes a wide range of other reports - we try not to rely on them wholly though, as you rarely can be 100% sure that the information is accurate. Where possible we would rather obtain a source document ourselves, but if this can't be done, then databases like this can be invaluable. If we do rely on them, we make it clear to the lawyer where the information has come from and warn him that it may not be 100% authoritative.

If the company is a very large (and if so, it's generally listed on a stock market) then always check the company website. If it is a publicly listed company, then they are required to publicly file annual reports and a plethora of other financial information. So for example, if it's a US public company, they are required to file at the SEC (Securities Exchange Commission) - if you look for a form 10-K for that company on the SEC website itself, OR in most cases on the company website as well, then you will be able access a wealth of information, as the 10-K is an annual report. Along with this report and all the information about the business it does, the directors and so on, if you look at the list of Exhibits filed with it and go to Exhibit 21, you will find a list of that company's main subsidiaries - this can be invaluable for many reasons.

If we are looking into a non-UK, very tiny company, and we can't find anything at the local registry AND there isn't any information on any of our databases, then sometimes there is nothing else to do but general internet searching (ssshhh - obviously we don't encourage taking information from unauthoritative sources, but when all else fails, it's a good last resort!) Press searches are worth a shot too, as by this stage, you are often so desperate to just find anything to prove that the company does - or did - actually exist, that even just a random article mentioning them can make your day! Moreover, this kind of searching may not lead you to the company name you have been given by the fee-earner, but it might just lead you in the right direction somehow - you might find a company owned by the same group, for example, which might in turn provide you with another lead for the company you were looking at originally...

Sometimes after establishing who is behind the company, we then go onto find out information about them - if they are individual people we will try and find out what other companies they are associated with; and if it's another company that owns the company in question, we will try and find out more about it. Often you end up tracing the chain of people/companies involved back further and further until you either reach the top of the chain, or you find that you come across an entity that is registered in somewhere very remote like the British Virgin Islands - and suddenly you will find that your searching almost grinds to a halt!

Companies registered in places like the Cayman Islands/British Virgin Islands and so on, are generally filed there for a reason - the main reasons being that there are various tax benefits AND the filing requirements are minimal - so it's good for the company owner, not so good for us back in the UK trying to obtain authoritative information on them. These offshore types of registries do make it very difficult to obtain any information at all - the process is often extremely protracted and if you do manage to follow it through without losing your sanity in the process, then you often find that all you get at the end of it is little more than an incorporation date!

It's times like this where we can offer our lawyers the services of a specialist company information provider. Most law firm libraries tend to use one - the prices for obtaining information on non-UK entities can be pretty pricey, which does put a lot of our lawyers off using them, but if they are really desperate, there is often no other way. These providers often have links to agents in the very country in which you're interested, so they can obtain information a lot easier than we can back in good old Blighty....

Well - there you have it - a VERY general look at the problems and pitfalls of conducting research on non-UK companies. Sometimes it really does feel like being a detective, as one small piece of information from the most random place can lead you to the very information you need on a particular company.

 Now I wonder what jurisdiction I'll be looking into this week...anyone know the filing requirements in Albania....?!! :)

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  1. Your post really made me smile. I often hear myself sigh when I realise a company I'm researching is based in the BVI or similar tax haven. I love the "Certificates of Good Standing" which I'm sure could say whatever you want them to if you paid the right price. Working in property rather than a law firm I've never heard of specialist company information providers though and am intrigued to know what they can provide?

  2. Hi - many thanks for your comment, nice to hear of someone in the same boat with that sinking feeling when you hear the words company AND BVI! In all the law firms I have worked in, we have used agents - not that I want to promote any in particular, but the ones I am aware of are 7Side, RM Online and ICC. Basically these companies have contacts in most jurisdictions, so they have someone in the country who can get as much information as is available for you. Downside is it can be pretty expensive, so we only use them for foreign company info as a last resort.