Is This Company Legit? Six Free Checks

No single check proves a business is honest. Each check below catches a different kind of problem, and all of them are free.

1. Look the business up in its state's records

Every LLC, corporation and limited partnership is formed by a filing with a state, and that record is public. Look for:

The exact legal name. It should match the name on the contract, invoice or website, or the business should explain the difference (a trade name, see what a DBA is).
The status. "Active" or "good standing" is what you want. "Dissolved", "revoked", "forfeited" or "inactive" means it is not authorized to do business there as things stand; see what each status means.
The formation date. A company that claims decades of experience but was formed last month deserves a question.
The registered agent and address. These show where legal papers are served; see what a registered agent is.

Search the state where the business says it is based, and the state where it works with you if that differs: a company formed elsewhere usually registers as a "foreign" entity in each state where it does business.

2. Check its licenses

Contractors, electricians, plumbers, real estate agents, insurance agents, lenders, debt collectors, movers and many health professions need a license from a state board or agency, and most boards have a public license search. Search the license number the business gives you, and check that the name on the license matches. A sole proprietor usually has no state business record, so for them the license is often the best official check.

3. Look for complaints and actions

The state attorney general. Its consumer protection office takes complaints and can act against businesses that break consumer law. Ask whether it has complaints on file about the business; find your attorney general through the National Association of Attorneys General.
The Better Business Bureau. Search the business on BBB.org and read the complaints and how the business answered them. BBB itself says "A rating is not a guarantee of a business's reliability or performance", and its letter grade does not use customer reviews.
A web search. The FTC suggests searching the company or product name with the words "complaint" or "scam" (FTC).

A few complaints are normal for any business that has customers. Look at what they are about and whether the business resolved them.

4. Read reviews with care

The FTC advises reading reviews from several sources and considering where a review is posted, who wrote it and the reviewer's history. A page of five-star reviews written in the same week, in the same voice, is a warning sign rather than a reassurance.

5. Watch for red flags

Red flag	Why it matters
Payment only by gift card, wire transfer, cryptocurrency or a payment app	The FTC says never to pay someone who insists on these (FTC).
Pressure to act right now	"Honest businesses will give you time to make a decision," says the FTC.
A name that is not on any state record	A company calling itself an LLC or "Inc." should be registered somewhere. Ask which state.
A status other than active	A dissolved, revoked or forfeited company may no longer be authorized to do business in the state.
No physical address or working phone number	You need a way to reach the business, and to serve it with papers, if something goes wrong.
A license number that does not match the name	The license may belong to someone else.
Claims to be a government agency	Government impostors are a common scam. Check the site's address ends in .gov.

6. Pay in a way you can dispute

The FTC says paying by credit card "best protects you and your money in case of a scam": if you are billed for something you never got, or get the wrong or a defective item, you can dispute the charge (FTC). Keep the contract, invoice and messages.

If something goes wrong

Report fraud and bad business practices to the FTC at ReportFraud.ftc.gov, and file a complaint with your state attorney general. If the business is a company, the state record shows its registered agent: the address where legal papers can be served on it.

Want to know who is behind a company, not just whether it exists? See how to find who owns an LLC.

General information, not legal or tax advice. Facts checked 2026-10-26 against the official sources linked above; confirm with the state or the IRS before you file. How we check our facts · Report an error