Credit Check a Non-Limited Business or Limited Company 

Below we explain the difference between a Limited company and Non-Limited business, and how to get information on each.

Limited Company, Non-Limited 'company' - these terms are bandied about in business circles as if everyone is expected to understand what they mean. The truth is, however, many business owners do not fully understand the difference between the two types of business - and many aren't aware of the different credit information that can be obtained according to each company. This article will provide a definition of the difference between a Non-Limited (Business) and a Limited Company - and will provide you with an overview of the various information available when conducting relevant credit checks.
 

Limited Company

According to the UK Government website the definition of a Limited Company is as follows: 'an organisation that you can set up to run your business. The company maintains responsibility in its own right for everything it does and its finances are separate to personal finances'. This sounds simple enough, but the implications for creditors can be quite profound because Company Directors are not personally liable for any debts incurred by the business and therefore, should the Limited Company run into financial difficulties, creditors can find themselves unable to recoup outstanding debts.
 

Credit checking a Limited Company

If you are considering providing a service to a Limited Company, make sure you run a relevant credit check. There are a variety of online credit check facilities available but you will need to ensure you use the right kind of credit checking service specifically relevant to Limited Companies. First Report offer company credit check reports which give business owners an insight into the financial viability of the Limited Company about which they are enquiring. Information available includes extracts pertaining to the last five years of company accounts, any satisfied and unsatisfied County Court Judgements, names and addresses of Company Directors and - crucially - a credit risk score. This transparency can prove invaluable to those business owners who are dealing with a Limited Company - and could save you from taking unnecessary financial risks.
 

What is a Non Limited 'Company'?

A non-Limited company is not actually a 'company' but an unincorporated business, so it is therefore more accurate to use the description "non-Limited business" or "unincorporated business", or to specify "sole trader" or "partnership" if the ownership structure is known. Most are sole traders and partnerships. This is because non-Limited businesses usually possess fewer assets than their Limited counterparts, and often anticipate achieving a lesser financial turnover. That's not to say that a non-Limited business is any less worthy of receiving credit but it does mean that the owner(s) of the non-Limited business maintain full responsibility for any business debts accrued. Obtaining a credit report in relation to a non-Limited business can prove highly beneficial for those business owners who are considering extending a service to this type of company.
 

Credit Checking a Non-Limited business

It is only by accessing a non-Limited credit report that business owners can accurately assess the financial risk imposed by the sole trader (or partnership). You can run a Non-Limited business search online. There is a range of information available through this platform, including names of the business owner(s), the number of employees working for the company, the credit rating score and risk, and details of any County Court Judgements either spent or outstanding.

Whether your business is dealing with a Limited or a Non-Limited business, it is imperative that you obtain an accurate portrait of any potential financial risk imposed by the company by running an appropriate credit check.

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