How to Identify Fake Companies in India:
The Company Act, 2013 defines a “Company” in India as:
A registered association which is an artificial legal person, having an independent legal, entity with a perpetual succession, a common seal for its signatures, a common capital comprised of transferable shares and carrying limited liability.
Features and Characteristics of a Company:
- Incorporated association: For a company to come into existence it must be registered under Company Act. It should also fulfil the various requirements of MoA, AoA, directors, shareholders and share capital.
- Artificial Legal Person: In the eyes of law, a company is an artificial legal person, which has rights to acquire and dispose of property, to enter into contracts in its own name, to sue and be sued by others etc.
- Separate Legal Entity: A company has a distinct entity and is independent of its members and persons controlling it. The individual members cannot be sued for actions performed by the company. Similarly, the company is not liable to pay for the personal debts of its members.
- Perpetual Existence: Unlike other non-registered business entities, it’s life doesn’t depend on the life of its shareholders, directors etc. Members may come and go, but the company continues forever.
To find whether a Company is Real or Fraudulent:
Step 1: Visit the website of Ministry of Corporate Affairs, by clicking on the link below: http://www.mca.gov.in/mcafoportal/showCheckCompanyName.do
Step 2: Enter the Company name. Don't try with short forms or half names, rather type full name in the search box.
Step 3: If the company is not registered you shall get an information – Entered Company/ LLP name does not exist.
Step 4: If the company is registered you will get the following information for the company.
- LLPIN /CIN /Form INC-1 Ref No
- Company/ LLP Name
- Incorporation Date
- Company Name Status
It helps find the following:
- Whether the Company is registered or not
- State and date of incorporation
- Company’s present status
Step 5: Navigate to the link: http://www.mca.gov.in/mcafoportal/viewCompanyMasterData.do
Step 6: Enter the LLP number, to get the following additional details:
- RoC Code
- Registration Number
- Company Category
- Company Sub-category
- Authorised Capital in Rs
- Class of Company
- Paid up Capital in Rs
- Number of Members (Applicable in case of company without Share Capital)
- Complete registered address
- Address other than R/o where all or any book of account and papers are maintained
- Email ID
- Whether listed or not
- ACTIVE Compliance
- Suspended at stock exchange
- Date of last AGM
- Date of Balance Sheet
- Company Status (for e filing)
Using MCA Portal one can gather a lot of information about Companies. But, at Zauba Corp (https://www.zaubacorp.com/) you can get following additional information:
- Activity of Company
- Directors of Company
- Other Directorships
- Trademarks of Company
- Documents of Company available in public domain
Also, by creating an account, and paying a small sum of money, you can download all the documents of the Company, which has been submitted with the Registrar of Company.
Step 1: Navigate to the link – https://whoisology.com
Step 2: Enter the domain name, without http or https in the search box, and tap enter.
Sample Search on “Whoisology.com”
Tapping on the numbers within the boxes besides the Name, Email, Phone etc provides details of other domains having the same corresponding “Registrant details”!
Thus, it helps identify other websites of the registrant. This in turn, can enable identify a pattern between the websites of Registrant.
The Wayback Machine:
Websites on the internet change regularly. So, to search the previous version of the website, navigate to the link - https://archive.org/web/
Sample Search on “The Wayback Machine”
In case, the previous versions of the website, has already been archived. Then, tapping on a particular date, provides the version of the website on that particular date.
This enables to see the previous version of the website. If the website owners change the crucial details like number and mail ID frequently, it’s one of the biggest red flags.
Other Sources of Information:
Most of the Companies have their online presence as well. A careful scrutiny can provide valuable insights like:
- Additional contact details
- Employee details
- Focus area of the company
These parameters are crucial to form first hand opinion. For example, grammatical and punctuation errors, incomplete information, non working contact details and payment in forms which are relatively difficult to track back – are warning signs of a fraudulent company.
Who Is Lookup:
To find details about a particular domain name:
Step 1: Navigate to the link https://viewdns.info/whois/
Step 2: Enter the domain name in the search box, without http or https. An example, is facebook.com, zaubacorp.com etc.
If the website registrant, has not purchased WhoIs privacy, you may find the following accurate information about the registrant:
- Phone Number
- Complete address
- Company’s number and email ID: If there are no ways to contact the company offline, it’s one of the warning indicators, that the business may be fraudulent.
- These days, even numbers and address are easy to fake. If possible, visit the official address of the company to find out the details. If the company does not exist at the address shown in the MCA portal database or at the address shown on the website, then it’s one of the surest sign of fake company.
- Check website for discrepancies: If the website says one thing at one place, and then contradicts itself at another spot, it’s a red flag that the business is scam, and has been hastily stitched together by un-professionals.
- Signs of unprofessionalism: For example, grammatical and punctuation errors, spelling errors, stolen images etc are other indicators of unprofessionalism.
- Look for decent content: Fake and fraudulent websites, generally have limited content and pages, and use lots of fake certificates to trick users.
- Using stock images as product, employee, building or logo: Using stock photos as products, logos, employees means the website is trying to portray other’s credentials as theirs. Thus trying to deceive its potential customers.
- Modes of payment accepted: If the website only accepts payment through insecure and shady means like cash, Bitcoin etc, then avoid doing business. Otherwise, you won’t be able to get money back if things turn sour, later on.
- Registration data for the company’s website: If the registration data reveals, it has been created recently and will expire soon, then most probably the website is a temporary cover for scam.
- Check the company’s reviews: It can be searched on internet, with simple Google search or by using various Google advance operators like double quotes, file-type, site etc. Various consumer review platforms may reflect the true opinion of its products and services.
The aforesaid discussed methods may be used to determine whether a company is genuine or trying to fleece its customers. These days, creating online websites, is super easy. So, be cautious and investigate well before investing into it.