How to check a company is real before investing

July 18, 2019 11:02 am Published by check a company is real before investing


This post is part of our CREST investment series, explaining the 5 things investors should consider when evaluating an investment opportunity.

No one wants to lose their hard-earned money.

Most property developers are trustworthy people who would not dream of being careless with their investors’ money. Unfortunately, it can be all too easy for a few bad eggs to ruin things for everyone else, for an unscrupulous developer to set up a company that seems legitimate and reputable at first glance. They can then ask for your ‘investment’ and proceed to use it for purposes for which your money was not intended.

Before investing your hard-earned money, consider both of these questions:

  • Is the developer (company) legitimate?
  • Is the developer (person, director/owner) trustworthy?

Don’t get scammed

In the first instance, you want to make sure that your potential investment is not a scam. The Money Advice Service shares its recommendations about how to spot an investment scam. One of the biggest warning signs to look out for is being solicited by a company. A legitimate and successful company will not approach you with cold calls about investing or pressure you to invest.


10 ways to check if a company is real before investing

How can you ensure that a property developer is worthy of your trust? Well, we’ve listed ten simple ways to assess how legitimate a company and its directors are below.

1. Google the company

Google can help you find out all sorts of information about a company, including much of the following…

2. Read online reviews

Check for online reviews and testimonials. Trustpilot is a great place to start. Reviews not only support that a company is legitimate, they will also give you an idea of how the business operates, its customer service etc.


Check the website

3. Check their website

Have a browse of the company website and look for the following:

  1. A privacy policy
  2. Good English with proper grammar and spelling
  3. A regularly and recently updated blog (with more than a couple of posts)
  4. A company statement
  5. Information about who owns and works at the company
  6. Look for https:// at the start of their web address, along with the padlock symbol.
    This provides an “enhanced security layer over the unsecured HTTP protocol for sensitive data and transactions such as billing details, credit card transactions and user login etc.”*
    By having this in place, the company demonstrates that they care about protecting the privacy and security of its website users.
    *SOURCE: Techopedia

4. Look for an office address

It should be easy to find out the address of a legitimate company. It will be listed on their website and likely come up in a Google search too. If this is a registered office address, that’s a good sign that the company is real. If you aren’t sure, you could take a look on GoogleMaps Street View or if you live close by, pay them a visit.

5. Give them a call

A legitimate company should have a landline. Give that a call and speak to an employee or the business owner. Your call should be answered by a real person, in a professional manner, mentioning the company’s name at the start.

Ask a few questions (such as “Can I check that your office address is…”). This conversation should reassure you. If it doesn’t, that’s a red flag.


Give them a call


6. Search LinkedIn for company employees

Once you have the names of any contacts at the company, either from their website or from calling and speaking to them, take a look at LinkedIn. Search for both the company and the employees that you know of, to confirm that they work there.

7. Check social media

As well as being another source of reviews and feedback, a company’s social media presence can be an indicator of credibility. Look for regular professional posts on more than one channel, plus engagement and authentic (i.e. not automated or ‘bot’) responses. The company should also have a decent amount of genuine followers if they are active on social media.



8. Look at Companies House

If the business that you are looking into is a limited company, you will be able to search for it online at Companies House. This will show you the names of the directors, confirm the business address and how long it has been operating. Research the directors in addition to the company. Look at their track record and experience. How many projects have they completed and exited successfully? Does the information at Companies House match what they have told you?

9. Look at testimonials from investors and business partners

Ask for testimonials and contact previous investors directly for their feedback. Are the same companies and individuals keen to invest and work with the developer again? If not, why not? This can be a major warning sign.
Testimonials and investor feedback should give you further peace of mind, especially if the developers have cultivated repeat business and investment.

10. Trust your instincts

This may be the most important of all. If anything feels ‘off’ about a company, or you aren’t comfortable dealing with them, don’t take any risks. It’s always better to be safe than sorry, so go with your gut instinct. A legitimate company will be happy for you to carry out due diligence before investing with them.


Trust your gut


Once you have done your due diligence and feel confident about a company, you should feel somewhat reassured. However, as important as trust is, it is not enough.

Pay attention to how open a company and its director are to requests for information. Are you getting answers to your questions? Are they able to put you in touch with real, credible investors and business partners so that you can ask for genuine, honest feedback?
Request the same amount of information as a bank would. If it is not forthcoming, steer clear.

By taking these steps to check a company is real before investing, you will significantly reduce the likelihood of being scammed.

Share this article on social media and tell us YOUR tips for checking the legitimacy of a company.

Click here to read the rest of our CREST investment series. This explores the 5 things investors should consider when evaluating an investment opportunity.

Click here to find out how property development works.