How to check if a business is legitimate in Australia, step by step.
Doing business in Australia offers numerous advantages due to its stable political environment, strong economy and strategic location in the Asia-Pacific region. Knowing how to check if a company is legitimate in Australia is crucial to leveraging these benefits while ensuring compliance and securing trustworthy partnerships.
Why check if a business is genuine in Australia?
When launching or growing your business in Australia, you are likely to interact with a host of potential new business partners, merchants or customers. It’s important to approach these new commercial relationships with caution. Not every entity or individual you meet is legitimate or ethical – and believing that all businesses have been automatically screened and approved by authorities can lead to potential vulnerabilities.
It’s therefore vital that you understand how to check if a business is legitimate in Australia. This involves establishing a clear process, backed by the right data and technology, to identify, verify and monitor the credentials and backgrounds of the entities and individuals you plan to do business with, beyond just taking their word for it.
Fortunately, there are several tools at your disposal to verify their claims and ensure you’re dealing with a trustworthy partner. But before we explore these in detail, let’s look at how to check if a company is legitimate in Australia.
Step 1: Understand your regulatory obligations
The Australian Transaction Reports and Analysis Centre (AUSTRAC) is a government agency that focuses on mitigating money laundering, terrorism financing and other financial crimes by overseeing the compliance of businesses with financial regulations.
When establishing how to check if a company is legitimate in Australia, it’s important to also familiarise yourself with the regulatory requirements your business must adhere to in this country. For instance, AUSTRAC regulates certain businesses that engage in “designated services” – activities that are recognised for their vulnerability to money laundering and terrorism financing. If a business offers a designated service and has a connection to Australia, it is considered a reporting entity. This status brings with it strict regulatory requirements; necessitating Know Your Customer (KYC), Know Your Business (KYB), and Ultimate Beneficial Ownership (UBO) practices which are fundamental in meeting these legal obligations.
Even if your business doesn’t directly fall into these high-risk categories, adopting KYC, KYB and UBO processes is beneficial. Beyond legal compliance, these measures help your firm establish guard rails for how to check if a company is legitimate in Australia.
Step 2: Collect and verify the necessary business registration information
When deciding how to check company registration in Australia, it’s important to identify the official sources of information – in this case, the Australian Securities and Investments Commission (ASIC), where all companies are required to be registered.
Additionally, all companies will be assigned an Australian Company Number (ACN), which is a unique 9-digit number allocated to each company registered under the Corporations Act 2001.
Individuals conducting business under their personal name do not require a registered company name. However, they will need an Australian Business Number (ABN), which is crucial for tax and business activities. The ABN is a unique 11-digit number that identifies businesses to the government and others.
- When designing a process for how to check if a company is legitimate in Australia, you need access to multiple pieces of information. This includes:
- Name
- Date of incorporation
- Registered capital
- Former names and changes
- Share currency
- Contact and address
- Status and legal forms
- Activities and business scope
Step 3: Ensure access to personnel, ownership and legal data
When creating strategies for how to check company registration in Australia and how to check if a business is legitimate in Australia, you also need a plan for sourcing and verifying the following information.
Key personnel and ownerships:
- Officers
- Directors
- Shareholders
- Share currency
- Registered capital
Legal documents:
- Current and historical company information
- Any changes to company details
- Annual returns
- Any deregistration requests
- Copy of financial reports and accounts
- Any notices of change to officeholders
When crafting a blueprint for how to check if a company is legitimate in Australia, take care not to stop at just collecting and vetting the above details. You should also continually monitor key business details to ensure you remain fully informed of any changes.
Step 4: Build a strong Know Your Customer (KYC) process
Once you have established how to check company registration in Australia, you’ll also need to ensure you are meeting your Know Your Customer (KYC) compliance requirements. This is particularly important for any business defined as a reporting entity under section 6 of the AML/CTF Act.
KYC involves implementing robust customer identification procedures to verify the identity of your customers and make sure they actually exist. This includes:
- Individuals
- Non-individuals such as businesses or organisations
Step 5: Understand who ultimately owns or controls an entity
Another important step to remember when establishing how to check if a company is legitimate in Australia, is to identify the beneficial owners of the entities you’re engaging with, so you can assess the risks they pose.
A beneficial owner is someone who ultimately owns or controls a company, trust or partnership. An organisation may have a single beneficial owner or multiple beneficial owners.
Here’s a quick breakdown:
Owners: Individuals who own 25% or more of a business, directly (like owning shares) or indirectly (like owning through another company or via a bank or broker), they are considered a beneficial owner.
Control: Individuals have control if they have the power to make decisions about the company’s money and how it runs. This might be through trusts, agreements or other ways.
Technology’s role in verifying business legitimacy
Technology is a key consideration for any business exploring how to check if a company is legitimate in Australia. By streamlining checks and verification processes with technology, companies can significantly reduce the time and resources required for onboarding.
AsiaVerify stands out by offering real-time access to data from official sources in Australia and across the Asia-Pacific (APAC) region. When conducting a company registration search in Australia, AsiaVerify uses cutting-edge technology to ensure direct linkage to government registry sources. This facilitates immediate access to real-time company registration data and overcomes the blind spots that occur when using traditional search methods.
This innovative technology is also transforming how firms conduct UBO checks in Australia, making it easier to uncover who really owns and controls companies. AsiaVerify’s advanced AI explores company structures offering a fully customisable tool which swiftly pinpoints individuals who own anything above 25% of a company, enabling instant verification of ownership and business relationships with a single click. Additionally, you have access to tools that allow you to visually dissect complex corporate structures and adjust the threshold for identifying beneficial owners as needed. Access to UBO reports is immediate and information is available at the click of a button, ensuring that no important information is misunderstood or overlooked.
Conclusion
Australia is an ideal destination for firms looking for growth opportunities, stability and a dynamic environment for innovation. Knowing how to check if a company is legitimate in Australia and having a solid, technology-enabled process in place to support this is a crucial part of establishing compliant and lasting commercial partnerships in this market.
For more information on how to check if a business is legitimate in Australia or any other APAC jurisdiction, including how verify a Chinese company and how to verify a Japanese company, reach out to our team. We are here to support you.
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