A new smartphone application developed by the Australian Securities and Investments Commission (ASIC) will help small business owners undertake important checks before they enter into business transactions with other organisations.
Brett Bassett, Senior Executive Leader – Small Business Compliance and Deterrence & Regional Commissioner QLD, told Dynamic Business that it’s often the smaller businesses that get duped by unscrupulous operators.
“When we’ve been speaking with business owners over the past eighteen months, [and] sometimes they’re the ones who get swindled, and this can be because they are so time-poor, they don’t get the time to perform the due diligence checks that the bigger companies can do,” Mr Bassett said.
It is precisely for this reason that the regulator has designed and released this app, which includes 13 key questions business owners should be asking of potential partners.
The app is by no means designed to fulfill due diligence requirements, but to prompt business owners to ask the right questions before engaging in a new business relationship.
“They often don’t ask the right questions or the questions about the people they’re dealing with, and these 13 questions are the right questions in our view,” Mr Bassett added.
ASIC Commissioner Greg Tanzer says due diligence needs to start the moment someone is thinking about starting a relationship with a business, not after finding out that money is owed by a business that doesn’t exist.
“ASIC’s Business Checks app provides some general guidance on the steps small businesses can take to reduce the risk of being swindled by unreliable operators and fly-by-night businesses.
“There will always be an element of risk when you enter into business transactions, but you can help protect your interests by doing your homework and checking for warning signs,” Mr Tanzer added.
Available for smartphones and tablets, ASIC Business Checks encourages business owners to:
- Ask the right questions about the company, business and individuals they’re dealing with
- check ASIC’s registers and verify that the information they’ve been given is accurate
- seek ASIC’s help if they need more information or the support of a professional business adviser, and
- report suspected misconduct to ASIC if they believe a company, business or individual is acting unlawfully.
“We understand that time and resources are tight for small businesses, which is why we’ve developed a tool which is free and easy to use.
“Small businesses account for 96 per cent of businesses registered with ASIC, so a big focus for us in 2014/15 is providing the sector with information that is not only easily understood, but relevant and accessible”, Mr Tanzer said.