Check a Business Before Entering into an Agreement: A Practical Checklist

A simple supplier check can reveal an incorrect legal entity, missing signing authority, weak finances, or unclear delivery capability before the agreement is signed. How thorough the check should be depends on the contract's value, duration, and risk.

1. Confirm Legal Entity

Verify the registered name, organisation number (organisasjonsnummer), legal form (organisasjonsform), address, and whether the profile applies to the main entity or a sub-entity. Compare this with the offer, contract, and invoicing information.

2. Check Status in Registers

Look for the status in Enhetsregisteret (the Central Coordinating Register for Legal Entities), Foretaksregisteret (the Register of Business Enterprises), and Merverdiavgiftsregisteret (the VAT Register) where relevant. Registration is not a mark of quality, but discrepancies should be explained.

3. Who Can Sign?

Check the board, general manager, signing authority (signatur), and power of procuration (prokura). A title in an email signature is not necessarily documentation of authorisation. Request specific authorisation where signing rights are not evident.

4. Look for Bankruptcy and Liquidation

Check active status and public announcements. Differentiate between bankruptcy (konkurs), compulsory dissolution (tvangsoppløsning), compulsory liquidation (tvangsavvikling), and voluntary liquidation (frivillig avvikling). Always use the date and original source.

5. Assess the Financials

Review several years of:

• Turnover (omsetning) and growth
• Operating profit (driftsresultat) and margin
• Liquidity (likviditet) and working capital
• Equity (egenkapital) and solvency
• Debt (gjeld) and any significant changes

Financial statements are historical. Request more current documentation for larger or long-term agreements.

6. Confirm Delivery Capability

Register data does not necessarily reflect capacity. Request references, responsible personnel, staffing plans, certifications, insurance, and subcontractors where relevant.

7. Check Account Information

Changed bank accounts combined with urgency is a known risk signal. Confirm changes through an already established contact channel. Do not use the phone number in a suspicious email as the sole means of verification.

8. Document the Decision

Record which sources were checked, the date, any discrepancies, and who approved the supplier. Implement risk-based follow-up: critical suppliers should be monitored even after the contract has been signed.

How Proffi Should Facilitate the Check

Create a guide that consolidates register status, roles, signing authority, financials, announcements, public contracts, and data sources. Users should be able to save the check as a dated report and set up alerts for future changes.

Proffi must distinguish between public facts, the company's own information, and calculated assessments. An automatic score should never obscure the underlying data.