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"A similar name does not mean the same company"
The most common mistake in due diligence is not failing to find anything, but checking the wrong entity - finding a company with a very similar name and attributing its records to your counterparty.
Three easiest to mix up
- Different legal entities in the same group: the parent is clean, the subsidiary that actually signs has records (or the reverse)
- Names that sound alike but read differently: same pronunciation, different characters - two entirely different entities
- Names containing "group": most simply have the word in the name, which is not the same as being registered as a group enterprise
The only anchor
The Unified Social Credit Code. Names change, addresses change, abbreviations are everywhere, but the code is the only identifier. Every lookup should start from the code, not the name - the name is only used to find the entity, and once found you switch to the code immediately.
One question settles it
"Which entity is on the contract?" That one question clears up all three cases at once, and it is not offensive.
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