How to verify a business is registered in your state

When a company signs a contract with you, takes a deposit, or asks you to trust it with your money, it helps to know that it legally exists. In the United States, corporations, limited liability companies (LLCs) and many partnerships are formed by filing with a state government, and those filings are public records. Checking them takes a few minutes and costs nothing in most states.

Where business records live

In most states, business entity records are kept by the Secretary of State, usually in a division for corporations or business services. A few states use a different office: some have a department of state, a corporation commission, or another agency that handles business filings. The easiest way to find the right place is to search for your state's name plus "business entity search" or "secretary of state business search".

Make sure the site you land on is an official government site, which usually ends in .gov. Many private websites repackage state records, sometimes with fees or advertising, and their copies can be out of date. The official search is free or nearly free in most states.

How to search

• Search by name, and try variations. Records use the exact legal name, which may include "LLC", "Inc." or "Corp." and may differ from the name on the sign or website. Try a shorter version of the name if the full one returns nothing.
• Search the right state. A business is registered in the state where it was formed, which is not always where it operates. Many companies form in one state and then register to do business in others as a "foreign" entity. If you do not find it in your state, try the state where the company says it is headquartered.
• Use the ID number if you have it. Contracts and invoices sometimes include a state entity or file number, which gives you an exact match.

What the record shows

Details vary by state, but a typical record includes:

• Legal name and entity type, such as LLC, corporation, or limited partnership.
• Status. States use different terms. "Active" or "in good standing" generally means the business is current with its filings. Terms such as "inactive", "delinquent", "forfeited", "revoked", "administratively dissolved" or "dissolved" mean something needs a closer look. A lapsed status can mean a missed annual report, which is often fixable, or that the business has closed.
• Formation date, which tells you how long the entity has existed. Compare it with the history the business claims.
• Registered agent, the person or company designated to receive legal papers. Many businesses use a professional registered agent service, so the address may not be the company's own.
• Principal office address and, in some states, the names of officers, managers or members.
• Filing history, such as annual reports, name changes and amendments.

What the record does not tell you

A state registration shows that a legal entity was formed and whether it is keeping up its filings. It is not an endorsement, a license, or a sign of quality. Registering an LLC is quick and inexpensive, and states generally do not investigate who forms one.

It also leaves some businesses out entirely:

• Sole proprietors and many general partnerships do not have to file with the state to exist, so they may not appear in the entity search at all. That is normal and not a warning sign.
• Trade names. A business operating under a name other than its legal name usually files a "doing business as" (DBA), assumed name or fictitious business name. Depending on the state, these are filed with the state, the county, or both. If you cannot find a trade name in the state search, check the county clerk's office where the business operates.

Licenses are a separate check

Being registered and being licensed are different things. Contractors, electricians, real estate agents, insurance agents, doctors, lawyers, accountants and many other trades and professions are licensed by separate state boards or agencies, and sometimes by cities or counties. If the work you are hiring for requires a license, look it up with the licensing board directly. Our guide on checking a contractor walks through that step.

Other records worth knowing about

• Nonprofits: The IRS Tax Exempt Organization Search, on the IRS website, shows whether an organization is recognized as tax-exempt and lets you view some of its filings. This is useful before donating to a charity you have not heard of.
• Tax ID numbers: There is generally no public lookup for a business's federal Employer Identification Number, so do not expect to verify one yourself.
• Court records: Many state and county courts offer online case searches, which can show lawsuits involving a business. Being named in a lawsuit is not proof of wrongdoing, so read the details before drawing conclusions.

When the record does not match

A mismatch is a reason to ask, not to accuse. Businesses change names, move, and sometimes let filings lapse by accident. Ask the business directly and politely: "I could not find your company in the state records. What is the exact legal name you are registered under?" A legitimate business can usually answer right away.

The short version

State records confirm that a company legally exists and is current with its filings. Combine that with a check of the business's listing, website and phone, and you have a solid picture. Look up the business on CheckThisBiz, and read the CheckThisBiz methodology to see what its checks cover.