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Frequently Asked Questions

It is quite possible for a limited company report to contain no profit and loss and/or turnover figures, or that this information is missing for particular years. This is because the company concerned is exempt from disclosing these accounts according to the Companies Act and has chosen not to file this data, instead filing 'abbreviated' accounts. If the company is a 'small' company as defined by the Companies Act, then that company is exempt from filing profit and loss and turnover. If the company is a 'medium-sized' company as defined by the Companies Act, then it is required to file a profit and loss account but does not need to disclose its turnover. If profit and loss and turnover information for the company has been filed at Companies House our reports would show this.

Accounting exemptions for small companies.

In most cases, small and medium-sized companies and limited liability partnerships (LLPs) are entitled to submit abbreviated accounts to Companies House - which means they have to provide less information.

A small company must satisfy at least two of these three conditions:

annual turnover must be GBP £10.2 million or less
balance sheet total must be GBP £5.1 million or less
average number of employees must be no more than 50

A medium-sized company must satisfy at least two of these three conditions:

annual turnover must be GBP £36 million or less
balance sheet total must be GBP £18 million or less
average number of employees must be no more than 250

Why are there no accounts on my report?

It is possible that your limited company report does not contain accounts, most likely because the business is either not a Limited company, or because the company concerned is a relatively new company or it is dormant. Non-Limited Businesses are not required to file financial data for public record. Only Limited liability companies file information for public record at Companies House. A new company is given a lengthy period following its incorporation before which it needs to file accounts. It can choose to extend its accounting period beyond the usual 12 months, in which case the filing of accounts can be delayed up to 24 months from the date of incorporation (21 months for a PLC). A dormant company does not need to file accounts as it does not trade on its own account. Instead it may be carrying out business as part of a group or on behalf of a holding company.

Why isn't there a credit rating or risk indicator score on my report?

The Credit Rating and Risk Indicator Score apply to limited companies only. Check first to make sure that the subject company is a Limited company and that the registered number of the company you are interested in is the same as the one on the report. Please note that for non-limited businesses the only official information available is court records. We do provide a credit guide for non-limited businesses, although this is suppressed when adverse data has been recorded. We will supply a Credit Rating and a Risk Indicator Score on most Limited company reports. However, it is sometimes not possible to do so when there is not enough information filed at Companies House to formulate an assessment. In this respect there are a number of possible reasons why either or both the Credit Rating and Risk Indicator can be absent from a report. For example it may be that the subject company is quite new, in which case it may not have been trading as a Limited company long enough to file any accounts and will therefore not have enough of a track record for either a Credit Rating or Risk Indicator to be assigned. Another possibility is that the company is dormant, and similarly there may not be enough information to assign a Credit Rating. Occasionally there is no Credit Rating or Risk Indicator available until a report update has been carried out. Very occasionally the Risk Indicator Score is suppressed if under special circumstances there is a manual override of the data on a report.

Mortgages and Debentures

A mortgage is a loan usually to finance the purchase of property and usually with specified payment periods and interest rates. Debentures are loans that are usually secured and are said to have either fixed or floating charges with them. A secured debenture is tied to the financing of a specific asset such as a building or a machine. Then, just like a mortgage, the debenture holder has a legal interest in that asset and the company cannot dispose of it unless the debenture holder agrees. Debenture holders can receive their interest payments before any dividend to shareholders. If the business fails the debenture holders will be preferential creditors.

When a company raises a Mortgage or has a Debenture applied we send out Monitor alerts to clients who have placed the company on Monitor. It is possible to obtain more details about the Mortgages or Debentures from Companies House. We send out the alert soon after Companies House is advised about the mortgage, so it can be another 2 weeks before the information is processed at Companies House and available on public record.

Do you provide international overseas reports on companies outside the UK?

You can request a report on a company in any country. We provide international reports on companies in over 220 countries worldwide. Prices vary depending upon the country, the difficulty in obtaining information on the specified company and the time scale within which the report is required. We cannot guarantee providing a report within the requested time, although we do our best to achieve this. We will provide you with as much information as possible on the company concerned, although please note that few countries require businesses to disclose as much information as in the UK and we cannot therefore guarantee the amount of information that will be provided, although we can often give you a broad indication of the kind of information you may receive according to what we know about the country's particular filing requirements. If enough information can be obtained we usually provide a credit opinion. Credit reports on companies in the following countries are available online: Belgium, Czech Republic, Denmark, France, Germany, Ireland (Eire), Italy, Japan, Luxembourg, Mexico, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and USA. For all other countries offline reports can be provided within 2-12 days according to the speed requested when placing your order.

How can I see my own personal credit report?

You are entitled to see a copy of your own credit file with the agency holding the data. The Data Protection Act (1998) does not permit you to obtain this from us, or for us to provide this to you; we are unable to provide you with a consumer (or individual) report on you or members of your family. Individuals who wish to see the information contained in their credit file held by credit reference agencies can write to the agencies concerned or apply on the agencies' websites. For full details about personal files and the agencies which hold these files you can visit the Information Commissioner's Office website at ICO. The main consumer credit agencies also provide services to enable internet access to your own credit report online.

Data Protection and Data Protection Registration

The Data Protection Act requires any individuals and businesses (including overseas companies) to be registered in order to obtain UK consumer checks online. Consequently you will need to provide us with your Data Protection registration number. Please note that this should not be confused with a Consumer Credit Licence which is entirely separate. It may be worth checking first with your own company to confirm whether it does not already possess a Data Protection registration number, or whether your registration needs to be renewed. If you need to register do so here Online Notification Process.

Abbreviations and Codes used in reports

Click here for a full list of Abbreviations and Codes in reports.

Glossary of credit and financial terms

Click here for a full Glossary of terms used in reports.

Contact details for other Credit Reference Agencies and information providers

Experian 0115 941 0888
Equifax 0845 603 3000 option 6
Dun & Bradstreet 01628 492000
Check Free
Companies House 0303 1234 500
Graydon 020 8515 1400
Registry Trust Ltd 020 7380 0133
Charities Commission 0845 300 0218

First Report Risk and Credit Limit Methodology

The First Report Credit Limit is intended as a guide for trade credit. The First Report model is based on individual analysis of thousands of company accounts. Company accounts were manually appraised and 'acceptable risk' credit limits were calculated for each company. If the accounts presented unusual features the analysts conferred in order to reach a decision. The result of the manual analysis was converted into a credit rating model which has then been tested again with further manual appraisal on live company accounts over several years.

A 'Qualified' opinion indicates that although the credit limit stated appears realistic on the basis of the analysed financial status of the company, other factors may influence the ability to meet financial obligations. Additional care and further investigation may therefore be required. Where our reports include a full analysis this analysis will normally include reference to qualifying factors for consideration. Factors that may result in a qualified opinion include a qualified auditors report, lack of trade creditors, CCJ data, a parent company, or late filing of accounts.

A 'Suspended' opinion indicates that although the credit limit stated appears realistic on the basis of the analysed financial status of the company, the company has filed later accounts than those analysed. In these cases it is normally advisable to request a revised report based on the latest accounts. Within the First Report model a suspended indicator takes precedence over a qualified indicator, so a suspended indicator does not exclude the possibility of other factors that would otherwise have resulted in a qualified opinion.

Credit Agency Credit Limit Methodology

71-100 Very low risk
51-70 Low risk
30-50 Moderate risk
21-29 High risk
1-20 Very high risk
0 or minus - Very high risk

The credit limit is the recommendation of the total amount of credit that should be outstanding at one time. It is estimated using the Risk Weighting and key balance sheet figures for companies that file accounts; or using other non-financial information for companies which do not. A risk weighting is a formula that converts the rating into the risk weighting, which is later used for the calculation of the credit limit. As companies with higher ratings represent lower risk, they will be given a higher risk weighting, and vice versa. The extension of credit is thus related to the level of risk.

Qualifications in relation to credit score, credit level and risk rating

Any financial score, credit score, credit limit or risk rating proposed by us in relation to any given company is based on subjective criteria considered by us or our data providers in good faith to be relevant to the assessment of credit risk. These criteria are applied using proprietary algorithms again the product of our own or our data provider’s discretion. Any resulting score, limit and risk rating is based on these subjective criteria and is not therefore a statement of credit risk against any objective risk standard but is rather a statement of opinion based on the criteria that we or our data provider chose to apply using our or our data provider’s proprietary system. These criteria are necessarily limited, selective and incomplete. There are likely to be many other factors relevant to the making of any individual credit decision in relation to any particular company which are not necessarily available to us or our data provider or are not taken into account by our or our data provider’s proprietary system in proposing any given score, credit level or risk rating and which would if taken into account lead to that score, level or rating being increased or decreased. Accordingly, any score, credit limit or risk rating proposed by us is not, and cannot be taken as, a statement of creditworthiness in any given case.

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What to do when First Report and Credit Agency Credit Ratings are different?

By providing access to both models in our reports clients have the benefit of an assessment based on two methodologies. There is no 'right or wrong' credit risk rating; only the credit granter can decide what represents an acceptable business risk for their own business as this is not something a credit rating model can reflect.

It is only possible to know after the event whether a company has proven credit worthy for a given amount. All credit risk models are therefore imperfect, and although they can serve a useful purpose in assisting in the credit granting decision making process, they can only ever be a guide based on probability rather than certainty. The credit granter must consider all the other information presented in the report, and also obtain as much additional information as possible. The credit granter must also make a decision based on what represents an acceptable business risk for their own business as this is not something a credit rating model can reflect: a 10,000 GBP credit exposure may be modest for a large multinational company, but the same amount could be a significant risk for a small business. It may therefore be appropriate for a small business to have a lower risk tolerance than a large business would for the same debtor. It should also be understood that extending credit always carries a risk, and even if the risk can be loosely quantified by a credit score, that risk never-the-less remains. The only credit risk model which would be 100 percent right, would be a model that always predicts a 100 percent failure rate; that is, that all companies could possibly fail. However such a model would be of little benefit to practical credit risk assessment. The balance in any credit model is to offer a reasonable guide to the level of risk, while reducing the number of false alerts against generally sound companies. If a credit model scores a company as low risk, with for example, failure probability of 1 in 100, the fact is that the company may be the one that fails. This highlights another point about interpretation of risk probability. A probability of 1 in 100 does not necessarily mean that the subject company itself has a 1 in 100 chance of failure, but more accurately that out of 100 other companies that are known to have already failed, about one of these would have had a similar profile to the subject company. This is fundamentally how credit risk models operate: they analyse the profiles of known failed companies, identify regularly occurring features, and attempt to quantify the correlation between identified features and subsequent failure. However, not all failed companies will indicate the known warning features, and conversely some companies that exhibit warning features never-the-less continue to trade.

The First Report rating is calculated primarily for trade credit exposures. The First Report rating is accompanied by a written analysis which will explain any factors that have influenced the credit rating.

Both ratings are calculated guidelines. What is more important is for credit controllers to set credit limits that are appropriate for their circumstances and which they are comfortable with. To see an example of credit scoring you can run a free company credit check.

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Formulas used for financial ratio analysis

Click here for a Guide to Ratios used in our reports.

Company Valuations

The going concern valuation is based primarily on profitability, and uses EBITDA (earnings before interest, tax, depreciation, and amortization). Adding back interest paid accommodates the scenario where the seller pays off any business loans from the proceeds of the sale and the new business owner makes their own decision on the level of borrowing required to fund the business. Depreciation and Amortization are added back to profits because they are non-cash items. Audited accounts reduce profits by charging depreciation and amortization to the profit and loss account. This is an accounting convention and does not reflect any cash actually leaving the business. However it is worth remembering that depreciating assets do need replacing or adding to during the normal course of business, and in this respect the amount of depreciation and amortization may provide would-be business owners with a notional amount to budget for this cost. Typically a private company will attract a lower value than a public company, all else being equal, simply because the stock of a closely held company is non-marketable. Also for smaller companies the risk is considered greater than for large companies, and investors may seek a slightly higher percentage return on investment. So a lower purchase price may result for the smaller of two otherwise equal companies generating the same level of profits.

The valuations in our service are based solely on accounting data and when no profit and loss data is filed the valuation estimates are further limited by having access to balance sheet data only. Our service does not consider any specific factors or any strategic or commercial considerations which may influence the actual value to either buyer or seller and any consensus on a company's value can only be determined with disclosure of detailed information and a due diligence process. The high value is not a ceiling above which the company might not be expected to be worth. The high value is simply a reasonable expectation of a higher value as opposed to the conservative expectation embodied in the low valuation. Any actual valuation must be based on more detailed investigation and must take account of the specific circumstances and motivation for both buyer and seller. Neither valuation takes account of any strategic or economic value that may result from acquisition. Valuations are not to be treated as an absolute and there may be scope for significant upward or downward revision as circumstances and further information dictate. For example where a buyer has a strategic interest in acquisition the value may be higher, and where due diligence reveals less positive information about the business, then values can quickly fall.

Where the valuation is modest this may reflect inconsistent or modest profits in relation to the suggested valuation price. The level of profitability over latest and previous periods may need to show consistently higher returns on potential investment, i.e. the valuation price, if a higher valuation is to be easily justified. In some cases the valuation will not be much more than the net asset value. This is because a company's assets exist only to make profits. Unless a buyer has strategic interest in particular tangible or intangible assets, then the value of the business is normally limited to its ability to generate cash profits. Even a profitable company may not find a buyer willing to pay in excess of net assets unless the profits are high enough compared to the net assets value. When deciding how much to pay for a business a buyer will calculate the annual net income they can expect to generate. To justify the risk and effort the potential profits need to be sufficiently more than they would get from keeping their cash in a lower risk investment. The profits need to be even higher if the buyer has to cover the cost of borrowing to fund the purchase. If the investment return is not high enough, or the company is making losses, then a buyer may not even pay the net asset value.

Liquidation valuations are usually lower and are asset based. These reflect possible amounts realized if the assets of the company need to be liquidated rapidly. As such many of the assets may be substantially discounted. The liquidation valuations apply typical discounts to various asset classes, and suggest high, mid, and low values accordingly.

Because asset values can be significantly discounted in a rapid disposal scenario, if the net assets of the company are modest in proportion to the amount of debt, any surplus value of net assets over liabilities can quickly disappear. If a company is trading with negative net assets or net worth then it is even less likely to expect sufficient value would be realised in all assets to cover existing liabilities.

Searching Companies

You can search any UK company Check a Company and get a report straight-away. Basic search data is free. For the purpose and methodology see how to run a company credit check.

CCJs

CCJs, County Court Judgments are records of judgments recorded at Registry Trust, the official Registrar for the Register of Judgments, Orders and Fines. The CCJ data in our reports is provided by Creditsafe Business Solutions Limited. For more information about CCJs click here county court judgments for debt.

Debt Recovery

Our debt recovery service is free and clients report over 80% of amounts due settled within 14 days.

How can I see any personal data you hold about me under GDPR?

We only provide business credit reports, we do not provide reports on consumers. We are unlikely to hold any data on individuals that is not already in the public domain. For more information about the data we hold and how to make a request to see personal data please see Subject Data Access Request.

How can I correct or change information about my company?

We do not control or edit the information held by Companies House. Company directors can control the information disclosed about them by Companies House, but must do so with Companies House directly. To edit or amend information being held by and distributed by Companies House click here to contact Companies House

How can I remove my company listing from your website?

This information is the same information that is also freely available online at the website of Companies House. We cannot delete the source data as this data is ultimately held by Companies House and freely available under the terms of Open Government Licence, but we can add a ‘no index’ instruction on our website for your company page. The ‘no index’ tells search engines not to list that page on their index although we cannot compel them to follow the instruction, most major search engines including Google normally do so. It can take up to a month for the page to be dropped from the search results. To request removal of your company page from our website please click here to Contact Us

Privacy and how we use personal data

Please click here for more information about Privacy and Personal Data.

Late filing of accounts and Companies House COVID-19 filing period extension

Information about the temporary extension periods for filing accounts. This was withdrawn on 6 April 2021, see Companies House COVID-19 accounts filing.

Frequently Asked Questions

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