How to Find Out If an LLC Is Legitimate

By Brette Sember, J.D.

How to Find Out If an LLC Is Legitimate

By Brette Sember, J.D.

It's always a good idea to know who you are doing business with. With so much business done online, it's important to verify that the company you are choosing to do business with is who they say they are. There are several ways you can verify the authenticity of a limited liability company (LLC).

Man in blue suit looking at laptop while writing in notebook.

Checking with the State

All LLCs must register with the state in which they are located, so checking the state registry is a good place to start. First, you need to determine the state the company is located in. Check the company's website or call to ask where they are located. If they will not disclose their home state, this is a sign that you should not do business with them, as they may not be legitimate.

Once you determine the state, check the website for that state's Secretary of State, or other agency in charge of regulating businesses. Most states have searchable online registries where you can look businesses up. If the LLC is located in that state, but not in the registry, they are not a legal LLC in that state.

Using the Better Business Bureau

The Better Business Bureau (BBB) has an online database that assigns ratings to businesses. The rating is calculated using the length of time the company has been in business and the consumer complaints that have been filed against it. Also listed are the business's location, contacts, and any alternative business names used by the company.

This database can be useful in several ways. First, it can tell you where the company is located so you can check that state's registry. Next, it gives you an idea about how the business treats customers and conducts business.

However, there are several caveats. For one, no business is required to be listed with the BBB and, if a business is not listed, it does not mean you should assume they are not legitimate. Note that the whole point of the BBB is to list customer complaints. People don't write good reviews at the BBB, so take anything you read with a grain of salt. For every one complaint, there could be 1,000 satisfied customers who are not represented on the site.

Researching on Other Websites

If you're looking for further information, check the attorney general's website in the state where the business is located. Many attorney general sites track information about online fraud and scams, so you may be able to search the company's name. There are also a variety of privately owned sites, such as Scambusters, that list scams to be aware of and companies to avoid.

Red Flags to Watch for

There are a variety of potential problems that can tip you off that a company is not legitimate, such as:

  • A company pressures you to make a purchase or put up cash immediately.
  • A company accepts only money orders and wire transfer, not credit cards.
  • A business won't give you references when you ask for them.
  • The business asks for your Social Security number or bank account number.
  • The company won't provide its offer in writing.
  • The company offers a money-back guarantee. While this may sound like a benefit, you need to know all the restrictions and terms of the offer because there may be specific requirements you have to meet. If the process is onerous, steer clear.
  • The site address does not start with "https," which designates it as a secure site, and you are being asked to make a payment or provide secure information online. Do not provide any payment or sensitive information to a site like this.
  • A company contacts you via unsolicited email. Such offers are often spam at best and impending fraud at worst.

With some research, you can be sure that a company you work with is legitimate and properly registered as an LLC. A little legwork could save you headache in the long run.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.

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