For example, a director may undertake to stop acting as a director or taking part in the management of a company for a specified period. The existence of an enforceable undertaking accepted by us is a warning sign. There are some other inquiries you can make about the business. You can ask these questions even if the business you're interested in isn't a company. It's against the law for bankrupts to be involved in the management of companies.
Poor records are a definite danger sign.
An accountant isn't a guarantee of safety, but it means there's a better chance that the financial records are in order. Larger companies may have an external auditor as well. It's a good idea to check these references by phoning them and asking some questions. You can use their credit reference services to find out the credit rating of the business and if it has any credit defaults. This will tell you whether it's a good idea to extend credit to the business.