The background check can be conducted on an individual or a business to find out their reputation, credibility and any other particular information. This will help you to take a prudent and informed decision regarding any ongoing or potential association with them. It is needless to say that association with a wrong party can not only harm you financially but can also harm your reputation. Remember the saying ‘All that glitters is not gold’.
It is worthwhile to invest on obtaining complete information about a company or firm with which you are planning to form any important association, especially when the possible association is intended to be long-term. This should be done to check the background, financial position, reputation and credibility of the party. Some instances where due diligence is highly recommended are:• Banks/Financial Institutions before sanctioning substantial loan to an individual or business • Investors making decision on substantial investment • Franchisers before entering into franchise agreements • Choosing the supplier of goods or services to ensure that the supplier is reliable and is not involved in unethical business practices such as use of child labour, bonded labour etc.