ASIC commissioner Greg Tanzer said due diligence needs to start the moment a business is considering entering a relationship with a separate business.
“What you see on the surface isn’t always what you get,” Mr Tanzer said.
“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,” he said.
Mr Tanzer said there will always be “an element of risk” when entering into business transactions, but businesses owners can “help protect” their interests by “checking for warning signs”.
ASIC explained the ASIC Business Checks app encourages business owners to ask the right questions; check ASIC’s registers to verify information; seek ASIC’s help; and report suspected misconduct to ASIC.
“Small businesses account for 96 per cent of businesses registered with ASIC, so a big focus for us in 2014/2015 is providing the sector with information that is not only easily understood, but relevant and accessible,” Mr Tanzer said.
“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,” he added.