Supplier Onboarding KYC: Verifying UK Companies Before You Sign a Contract

Know Your Counterparty (KYC) is not just a regulated-sector obligation — it is good business practice for any company that places orders, extends credit, or enters long-term contracts with UK suppliers. A new supplier that looks fine on paper may be a dissolved company using a trading name, a newly incorporated shell with no track record, or an entity whose real controller has a history of insolvency. A structured KYC checklist at onboarding catches these risks before they become a payment default. This guide provides a step-by-step verification workflow that any procurement or accounts payable team can implement using publicly available data.

Step 1: Confirm the company identity

Ask the supplier for its full registered company name and 8-digit Companies House number. A legitimate UK supplier can provide both within minutes — the number is on every invoice they issue. If the supplier only gives a trading name, or if the trading name does not appear on Companies House, ask for clarification. A company that refuses to provide its company number is a red flag.

Step 2: Verify the company status

Look up the company number on a Companies House mirror and confirm the status is "active". If the status is "dissolved", the company no longer exists and cannot enter a valid contract. If it is "in liquidation" or "in administration", the company is in insolvency proceedings and you should not extend credit without written consent from the appointed insolvency practitioner.

Step 3: Check the filing history

Look at the company's accounts filing history. A company that files its accounts on time, year after year, is demonstrating basic governance. A company with accounts overdue by more than three months, or a confirmation statement that has not been filed, is a company whose directors are not meeting their statutory obligations — which tells you something about how they may treat your order.

Step 4: Validate the VAT number

Use a real-time VAT lookup tool to confirm the supplier's VAT number is valid and registered. Check that the registered business name and address returned by HMRC match the company name and the address the supplier has given you. A VAT number registered to a different company name, or an address in a completely different city, is worth one phone call before you proceed.

Step 5: Identify the People with Significant Control

Look up the PSC register on Companies House to identify who ultimately controls the supplier. A PSC who is also the PSC of multiple dissolved companies is a risk signal. A company with no PSC recorded is a compliance red flag (companies are legally required to register their PSCs). Cross-reference the PSC name against other companies they control to build a picture of their track record.

Step 6: Verify the registered address

The registered address on Companies House should match the address the supplier has given you — or at least be consistent with it. A registered address that is a serviced office or a residential flat while the supplier claims a warehouse is worth investigating. A registered address change shortly before a large order is unusual and worth asking about.

Step 7: Check directors' other companies

For larger contracts, look up the directors' names and see what other companies they have been involved with. Directors who have a portfolio of solvent companies are lower risk; directors whose history is dominated by dissolved companies or companies with persistent late filing are higher risk. This is not about refusing to do business with someone who has made mistakes in the past — it is about understanding the context.

Step 8: Record the result

Save every verification step — the date, the Companies House status, the VAT validation reference, the PSC names, and any concerns flagged — against the supplier record. This audit trail serves two purposes: it demonstrates due diligence if you are ever asked how you selected your suppliers, and it provides a baseline so you can re-check periodically and detect changes.

Making KYC routine, not exceptional

The most effective procurement teams add these checks to the onboarding form rather than treating them as an exception. A supplier onboarding form that captures the company number and VAT number, and runs the checks above before the first order is approved, turns KYC from an ad-hoc exercise into a controlled process. For the cost of fifteen minutes per supplier, you avoid the cost of a dissolved company's empty warehouse on the day you needed the goods.