🏢 How to Investigate a Business Before Suing
Pre-Litigation Due Diligence — Confirm the Entity Exists, Identify Who Owns It, Find Collectible Assets, and Build a Winning Strategy Before You File — 2025
📑 What This Guide Covers
⚠️ Why You Must Investigate a Business Before Suing
Filing a lawsuit costs money — court fees, attorney fees, service costs, and the investment of your time. Winning a judgment costs even more. The worst possible outcome is winning a judgment against a business that no longer exists, has no assets, or was never the correct legal entity to sue in the first place. Pre-litigation investigation prevents this scenario by answering three critical questions before you spend a dime on legal fees: ⚠️
📌 Does this business actually exist as a legal entity? Many businesses operate under trade names (DBAs) that are not themselves legal entities. If you sue “Joe’s Plumbing” and Joe’s Plumbing is a DBA for “Joseph Smith LLC,” your lawsuit may be directed at a non-entity — creating delays, dismissals, and wasted money.
📌 Does this business have assets worth collecting? A judgment is only a piece of paper unless the defendant has collectible assets. If the business is insolvent, dissolved, or asset-free, winning the lawsuit wins you nothing. Pre-litigation business asset investigation reveals whether collection is realistic before you invest in the fight.
📌 Who actually owns and controls this business? If the business entity is judgment-proof, the individuals behind it may not be. Alter ego liability and personal guarantees can make owners personally responsible — but only if you know who they are and can prove the connection.
🚨 The $10,000 Mistake
An attorney filed suit against “ABC Construction” for $85,000 in contract damages. After spending $10,000 in legal fees and winning a default judgment, the attorney discovered that ABC Construction was a dissolved LLC with no assets, no active bank accounts, and no registered agent. The actual work had been performed by the owner personally under the DBA name. The judgment was essentially uncollectable. A $200 pre-litigation business investigation would have revealed all of this before a single dollar was spent on filing fees.
🏛️ Step 1: Identify the Correct Legal Entity
The first and most critical step is confirming the exact legal entity you need to sue. Getting this wrong means your entire case may be misdirected: 🏛️
Search the Secretary of State Database
Every LLC, corporation, and limited partnership must register with the Secretary of State in the state where it was formed. Search by the business name to find the entity’s full legal name, entity type (LLC, Corp, LP), state of formation, formation date, status (active, dissolved, suspended, revoked), registered agent name and address, and filing number. If the entity is dissolved or suspended, you may need to pursue the individual owners instead.
Check for DBA / Fictitious Business Name Filings
If the business operates under a trade name, the DBA filing connects the trade name to the legal entity behind it. Search county fictitious business name records to find which person or entity registered the DBA. This is how you connect “Joe’s Plumbing” to “Joseph Smith LLC” or to Joseph Smith as a sole proprietor.
Verify Foreign Registrations
A business formed in one state but operating in another must register as a “foreign” entity in each state where it does business. Check Secretary of State records in your state for foreign entity registrations — this confirms the business is authorized to operate in your jurisdiction and provides a local registered agent for service.
Confirm the Entity’s Current Status
An entity’s status tells you a lot. “Active” means it is current on its filings. “Suspended” or “Revoked” means it has fallen out of compliance — which may affect its ability to defend lawsuits and may open the door to personal liability for the owners. “Dissolved” means it no longer legally exists as a separate entity — you may need to sue the individual owners directly or pursue successor liability.
💡 Why This Matters for Service of Process
Identifying the correct legal entity is essential for proper service of process on a business. You must serve the correct entity through its registered agent, officer, or managing agent. Serving the wrong entity — or serving a dissolved entity’s old registered agent — may result in defective service, allowing the defendant to challenge jurisdiction and force you to start over.
👥 Step 2: Identify Owners, Officers, and Key Personnel
Knowing who owns and controls the business serves multiple purposes — it identifies potential individual defendants, reveals relationships between entities, and provides targets for personal service if the entity cannot be served: 👥
📌 LLC members and managers. Some states list LLC members and managers in their public filings; others do not. For states that do not publicly disclose LLC ownership, operating agreements (obtainable through discovery or court order) reveal the membership structure. A skip trace on the registered agent often reveals the principal behind the LLC.
📌 Corporate officers and directors. Most states require corporations to file annual reports listing officers and directors. These filings are public record and identify the CEO, CFO, secretary, and board members — individuals who can accept service and who may be personally liable under certain circumstances.
📌 Sole proprietors. A sole proprietorship is not a separate legal entity — the individual IS the business. If the business you are suing is a sole proprietorship, you sue the individual owner directly. DBA filings reveal the individual behind the trade name.
📌 Personal addresses of key individuals. Once you identify the owners and officers, a skip trace provides their current personal addresses. This is essential both for service of process and for evaluating whether the individuals personally have collectible assets if the entity does not.
💰 Step 3: Assess the Business’s Financial Health
Before spending money on litigation, assess whether the business can actually pay a judgment: 💰
UCC Filings
Uniform Commercial Code filings reveal secured loans against the business’s assets — equipment, inventory, accounts receivable. Heavy UCC liens mean existing creditors have first claim on assets, potentially leaving nothing for your judgment. Conversely, the presence of UCC filings confirms the business has identifiable, financed assets.
Real Property
Search county property records for any real estate owned by the business or its principals. Commercial property, warehouses, office buildings, and rental properties represent significant collectible assets that can be liened and eventually forced-sold to satisfy a judgment.
Vehicles & Equipment
A vehicle search identifies company vehicles, trucks, heavy equipment, and other titled assets. For construction companies, trucking firms, and service businesses, vehicles and equipment may be the most valuable collectible assets available.
Tax Liens & Judgments
Existing tax liens and judgments against the business reveal financial distress AND competing creditors. If the IRS or state tax authority has already liened the business’s assets, your judgment will be junior to those liens. Multiple existing judgments suggest the business is already being pursued by other creditors.
Insurance Coverage
For tort claims (personal injury, property damage, professional malpractice), the business’s insurance coverage may be the primary source of recovery. Identifying the business’s insurer — through certificates of insurance, contractual requirements, or investigation — is critical for claims that may exceed the business’s own assets.
Business Licenses & Permits
Active business licenses and permits confirm the business is operating and generating revenue. A contractor’s license, liquor license, professional license, or similar permit is also a point of leverage — regulatory complaints can pressure businesses that ignore court judgments.
🔍 Step 4: Comprehensive Business Asset Investigation
A thorough business asset search pulls together all available public record information to create a complete picture of the business’s financial position: 🔍
| Record Type | What It Reveals | Where to Find It |
|---|---|---|
| Secretary of State | Entity type, status, officers, registered agent, formation date | State SOS website |
| County Recorder | Property deeds, mortgages, liens, judgments, UCC filings | County recorder’s office |
| Court Records | Pending lawsuits, existing judgments, bankruptcy filings | State and federal courts |
| DMV Records | Registered vehicles, titles, liens | State DMV (permissible purpose required per DPPA) |
| Business License Records | Active licenses, permit status, regulatory actions | City/county licensing agencies |
| BBB & Consumer Complaints | Complaint history, dispute patterns, customer grievances | BBB, state AG consumer protection division |
| Professional Licensing Boards | Contractor licenses, professional certifications, disciplinary history | State licensing boards |
⚖️ Step 5: Check Litigation History
The business’s litigation history reveals critical patterns and intelligence: ⚖️
📌 Has the business been sued before? Multiple prior lawsuits — especially for the same type of claim you are bringing — reveal a pattern of behavior and may support punitive damages or regulatory complaints. They also tell you whether the business has a history of paying judgments or ignoring them.
📌 Has the business filed bankruptcy? A current bankruptcy filing triggers the automatic stay, halting all collection activity. A prior bankruptcy may have discharged debts but also contains detailed financial disclosures (schedules of assets and liabilities) that are public record and provide a snapshot of the business’s finances at the time of filing.
📌 Are there other pending suits? Multiple current lawsuits may mean the business is under financial pressure — which could accelerate settlement negotiations or signal that the business may soon become insolvent. Coordinating with other plaintiffs can sometimes produce better outcomes for all creditors.
📌 Regulatory actions and enforcement. Check for actions by state agencies — consumer protection complaints, licensing board disciplinary proceedings, OSHA violations, environmental enforcement, and similar regulatory actions. These reveal compliance problems that may support your claims and provide additional leverage.
📬 Step 6: Prepare for Service of Process
Proper service of process on a business entity requires knowing: 📬
📌 The registered agent’s current address. Secretary of State records list the registered agent, but the address may be outdated — agents resign, move, or dissolve. A skip trace on the registered agent confirms they are still at the listed address.
📌 Alternative service targets. If the registered agent cannot be served, you may serve an officer, director, managing member, or managing agent of the business. Your ownership investigation (Step 2) identifies these individuals and their current addresses.
📌 Multi-state service considerations. If the business is headquartered in another state but operates in yours, you may be able to serve the business through its local registered agent (if it has one) or through the Secretary of State in some jurisdictions. If you need to serve in another state, understand the procedural requirements for out-of-state service.
🔍 Pre-Litigation Business Investigation — Know Before You Sue
Our business asset searches, skip tracing, and investigation services provide the intelligence you need before filing suit. Identify the entity, find the owners, assess collectability, and prepare for service — all in 24 hours or less.
Order Business Investigation →🎭 When to Pierce the Corporate Veil
If the business entity is insolvent or asset-free but the individual owners appear to have personal wealth, alter ego liability (piercing the corporate veil) may allow you to hold the owners personally responsible. Pre-litigation investigation can reveal indicators that support veil-piercing claims: 🎭
📌 Commingling of funds. Evidence that the owner mixes personal and business finances — using business accounts for personal expenses, transferring business funds to personal accounts, or failing to maintain separate books.
📌 Undercapitalization. The business was formed with inadequate capital for its intended activities, suggesting it was never intended to be a viable independent entity.
📌 Failure to observe corporate formalities. No board meetings, no corporate minutes, no separation between the owner’s personal and business decision-making.
📌 The entity is a shell. The LLC or corporation has no employees, no independent operations, and exists only on paper — serving as nothing more than a liability shield for the owner’s personal activities.
📌 Recent asset transfers. Property, vehicles, or funds transferred from the entity to individuals shortly before or after your claim arose — suggesting the entity was deliberately stripped to avoid liability.
✅ Pre-Litigation Investigation Checklist
Entity Identification
Secretary of State search completed — exact legal name, entity type, status, formation state, and filing number confirmed.
Ownership and Officers Identified
Owners, officers, directors, managers, and registered agent identified with current personal addresses confirmed via skip trace.
Asset Assessment Complete
Real property, vehicles, UCC filings, tax liens, and existing judgments searched. Collectability assessment made.
Litigation History Reviewed
Prior lawsuits, existing judgments, bankruptcy filings, and regulatory actions checked across state and federal courts.
Service of Process Prepared
Registered agent address verified. Alternative service targets identified. Out-of-state service requirements understood if applicable.
Veil-Piercing Potential Assessed
Indicators of alter ego liability evaluated. Decision made on whether to include individual owners as defendants.
❓ Frequently Asked Questions
📚 Related Resources
📋 Disclaimer
This guide is for educational and informational purposes only and does not constitute legal advice. Pre-litigation investigation strategies and legal theories (including alter ego liability and fraudulent transfer claims) vary by state. Consult with a licensed attorney before filing any lawsuit. People Locator Skip Tracing provides professional business investigation and skip tracing services — we do not provide legal advice or legal representation. Information current as of 2025.
