CHECKING COUNTERPARTIES AS PART OF BUSINESS PROTECTION

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CHECKING COUNTERPARTIES AS PART OF BUSINESS PROTECTION

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CHECKING COUNTERPARTIES AS PART OF BUSINESS PROTECTION - perevirka kontragentiv yak skladova zahistu biznesu

Counterparty verification is a common term that means the collection and analysis of information about any entity. Checking the counterparty allows you to draw the right conclusions about the prospects of cooperation.

The purposes of checking the counterparty can be several: 

  1. Counterparty inspection in order to minimize tax risks;
  2. Counterparty verification in order to minimize credit and financial risks.
  3. Checking the counterparty in order to avoid fictitious contracts and fraudulent schemes.

After making sure that the business partner is reliable, the firm minimizes the risks of making claims on the validity of the tax credit in terms of VAT deductions and expenses that reduce the taxable base for income tax.

Conducting a counterparty check is an important process that includes an algorithm of actions:

  • Electronic check. To begin with, it is necessary to use electronic public services on the website of the Tax Service, the State Executive Service, the website of the Ministry of Justice, etc.
  • Checking the counterparty in the Unified State Register of court decisions on the absence / presence of litigation, seizure of property, participation in investigative actions, etc.
  •  Request for documents. In order to minimize tax risks before concluding the agreement, the taxpayer is recommended to request documents confirming the legal capacity of the audited counterparty and the ability to fulfill its obligations.
  • The validity of the choice. In addition, we should not forget about the validity of the choice of this particular counterparty. In this case, you will need to save information about the counterparty obtained from the Internet, such as printing screenshots of advertisements. Commercial offers, price lists and business correspondence should also be kept. In addition, it is desirable to make sure that the counterparty is not part of the persons with whom, according to the tax authority through the legal address is missing. In addition, it is desirable to have copies of the passports of the head or persons who sign the primary documents.
  • Other ways to check. In addition to obtaining information about a potential partner on all of the above issues, you need to make sure that he: has no accounts in questionable credit institutions; there are all the necessary conditions for the fulfillment of contractual obligations, such as outlets, warehouses, transport; it is possible to fulfill an order for a trial, small batch of goods.

In this way, one can be convinced of the importance of the issues to be checked, and therefore a systematic and professional approach to this is important. Prikhodko & Partners Law Firm provides business legal support services. Contact us, we will be happy to help you.

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