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Why You Should Do a Jail History Check on a Business Partner
From a financial and operational standpoint, entering into a business partnership is an excellent strategic choice.
However, there are specific risks in business partnerships that will require you to take proactive steps so you can protect your interests.
For example, you may want to understand debt-related issues more because they can significantly affect how the partnership operates. You can visit this website to find ways to manage your debt and overall finances effectively.
At the same time, one of the most important things you can do before signing a business agreement is to conduct a criminal history check on the parties involved.
People, even professionals who have held high-level positions, may also commit fraudulence. Consequently, you are disadvantaged if you do not have sufficient knowledge of your business partner’s past conduct.
Conducting background checks is crucial because your business partner may withhold vital information from you so that you will view them and their partnership in the best light.
This article explains why you should conduct a criminal history check on your business partner. You can also read about the tools you might need and the process of conducting this background check.
Reasons for Conducting a Criminal Background Check
You need to conduct a criminal background check on your business partner if you want to:
- Confirm that your potential partner will be capable of contributing what they have promised to provide.
- Ensure your company is clear of any ongoing civil, criminal, or corporate litigation due to your prospective partner’s past activities.
Moreover, a background check can help clarify if your future business partner is financially unstable, going through a contentious divorce, or has poor credit. Knowing these details is crucial as they can immediately impact your business.
Additionally, a criminal history check includes examining tax records to ensure that your potential business partner has no outstanding tax debt. Unpaid tax bills can negatively impact investments in your business.
Attention to detail is necessary, especially when you are still at the early stage of your business venture. A start-up company requires maximum care from its founders before it can scale and become profitable.
It would be in your best interests to do as much research as possible to ensure that you have not overlooked factors that might come back to harm your business.
An excellent way to tell if you are doing everything possible to avoid unexpected and unfavorable consequences is to examine potential business partners thoroughly.
How to Conduct Criminal History Checks
Running a background check on any individual is relatively easy if you know what information you need to uncover.
Extensive background checks can show important information on your prospective business partner, including:
- Court documents, including past criminal convictions and sex offender status
- Current and previous civil litigation
- Insolvencies, bankruptcy, and other financial data
- Accounts on risky social media platforms and other websites, such as chat rooms or gambling portals
- Traffic violations
You may also use specific websites or software to run your criminal background checks. You should hire third-party service providers with expertise when conducting such procedures.
Other Types of Background Checks
Below are the typical background checks that employers run to screen their applicants. However, you can also use these procedures to uncover information regarding your potential business partner:
Some individuals include false employment history on their curricula vitae or job portfolio. These documents may include fabricated job experience and responsibilities.
Other false information involves skill sets, employment dates, previous employers, and job positions and roles. You may contact your business partner’s previous employers to verify your partner’s:
- Employment dates
- Job title(s)
- Roles and responsibilities
- Circumstances of separation
Another instance where your business partner may lie to you is when they mention educational institutions or academic degrees that they never earned.
An example of such a situation is the resignation of the Massachusetts Institute of Technology admissions dean after people discovered that she had falsely claimed to hold three degrees.
Similarly, a former CEO of RadioShack resigned after executives learned he had lied about having two degrees from a California institution.
Consumer Credit Reports
Examining your business partner’s credit records is necessary, especially when their company position would require them to carry out financial responsibilities.
Using such a report, you can determine whether your business partner’s financial situation might pose a risk in a company position involving money management.
One of the most helpful background checks may be the personal reference check. However, getting a reliable reference can be challenging.
By implementing well-planned and well-executed reference-checking procedures, you can obtain the most beneficial information about what to anticipate from prospective business partners. This reference check can provide you with more than just your business partner’s name, rank, and serial number.
Running various background checks on your business partner can increase your confidence in the partnership. This evidence-based trust can foster a culture of transparency and honesty in your business.
- Conducting Background Investigations and Reference Checks