A practical guide to researching UK companies before investing. What to check, where to find it, and what red flags to look for.
Why due diligence matters
Every year, thousands of angel investors and professionals back UK companies based on a pitch deck and a conversation. Many don't conduct structured due diligence until it's too late — by which point they've already committed capital, time, or reputation to a company they didn't fully understand.
Due diligence isn't about being paranoid. It's about making informed decisions. The data you need is almost entirely public. The challenge is knowing where to look and what to look for.
Step 1: Check Companies House
Companies House is the starting point for any UK company check. Every limited company in the UK must be registered here, and the records are free to access.
What to look for:
Company status — Is it active, dissolved, or in liquidation? A company listed as "active" with a "proposal to strike off" is a major red flag.
Incorporation date — How long has the company been trading? Younger companies carry more risk, but a long history doesn't guarantee safety.
Company type — Private limited (Ltd), PLC, LLP, and other structures have different implications for liability and governance.
Registered office address — Virtual offices or frequently changed addresses can indicate instability.
SIC codes — These describe the company's stated business activity. Check they match what the company claims to do.
Step 2: Review the directors
Directors are personally responsible for running the company lawfully. Their history tells you a lot.
What to check:
Current directors — How many are there? A single director with no oversight is higher risk.
Appointment history — Look for directors who have been appointed and resigned from many companies in quick succession. Serial directors with a trail of dissolved companies are a warning sign.
Concurrent directorships — A director holding 10+ active roles may be overcommitted. This isn't always a problem — investment professionals often hold many — but it's worth noting.
Recent resignations — A director leaving shortly before you're considering investing deserves investigation.
Step 3: Examine the financial filings
UK companies must file annual accounts with Companies House. The level of detail varies — micro-entities file very little, while larger companies file full accounts.
Key metrics to review:
Revenue and profit trends — Is the company growing? Are margins stable or declining?
Net assets — A company with negative net assets may be technically insolvent.
Cash position — Revenue means nothing if the company can't pay its bills.
Year-on-year changes — A single year's figures tell you little. Look at the trajectory.
Filing timeliness — Overdue accounts are a red flag. Companies that file late often have something to hide or are struggling operationally.
Step 4: Check charges and mortgages
Charges are registered when a company uses its assets as security for a loan. They're publicly visible on Companies House.
What matters:
Outstanding charges — These represent current debt secured against company assets.
Charge type — Fixed charges on specific assets (property, equipment) vs. floating charges on general assets.
Lender identity — Mainstream banks are normal. Unusual lenders at high rates may indicate difficulty accessing standard finance.
Recent charges — A flurry of new charges can indicate the company is taking on debt rapidly.
Step 5: Compliance register checks
Several UK regulatory registers hold important information about companies and their directors.
FCA Register — If the company claims to be authorised for financial services, verify it. Unregistered companies offering regulated services are operating illegally.
ICO Register — Companies handling personal data should be registered with the Information Commissioner's Office.
Insolvency Register — Check whether any directors appear on the Individual Insolvency Register, which covers bankruptcies and debt relief orders.
Step 6: Look for persons with significant control
Since 2016, UK companies must declare anyone who holds more than 25% of shares or voting rights. This is the PSC register.
Why it matters:
Ownership transparency — Who actually controls the company? Sometimes the directors are not the real decision-makers.
Complex structures — If the PSC is another company (especially offshore), the ownership chain may be deliberately opaque.
Changes in control — Recent changes in PSC data can indicate a shift in the company's direction or a sale.
Step 7: Review the filing timeline
The chronological history of a company's filings often reveals patterns that individual documents don't.
Patterns to watch for:
Clustered director resignations — Multiple directors leaving within a short period is one of the strongest red flags.
Late filings — Occasional lateness happens, but persistent late filing suggests management issues.
Charges followed by director changes — This sequence can indicate financial distress leading to governance upheaval.
Gaps in filing — Periods with no activity followed by sudden flurries of filings can indicate the company was dormant or in trouble.
Putting it all together
The challenge with manual due diligence isn't any single check — it's doing all of them consistently, cross-referencing the results, and synthesising a clear picture. This process typically takes 2–4 hours per company when done thoroughly.
This is exactly why we built Groundwork. It automates every step described above — pulling from Companies House, FCA, ICO, and insolvency registers, analysing directors across their full appointment history, extracting financials from filed accounts, and using AI to synthesise everything into a structured risk report with a 0–100 score.
The result is professional-grade due diligence in under 30 seconds. Not a replacement for deep diligence on your shortlist, but the right starting point for every investment conversation.