Updated
GL-K-03
Glossary · Due Diligence and compliance
KYB - Know Your Business
KYB (Know Your Business) — the check of a corporate client: its structure, beneficiaries and activity, the business equivalent of the KYC procedure.
01 / In 30 seconds
The short answer
- What it is
- KYB (Know Your Business) — checking a corporate client
- Equivalent
- The business version of KYC — “know your customer”
- What is checked
- The ownership structure, beneficial owners, activity, reputation
- When
- When opening an account or working with a legal entity
- How to use it
- Prepare a transparent company structure in advance
02 / In plain words
What KYB means
KYB (know your business) is the procedure for checking a company as a client, the business counterpart of the KYC (know your customer) familiar to individuals. When a bank, payment system or partner starts working with a legal entity, it must understand what kind of company it is: who really owns it, what it does, where its money comes from and whether there are risks.
KYB examines the ownership structure (down to the ultimate beneficial owners, UBOs), constitutional documents, type of activity, financial history and reputation, and runs the company and its owners through sanctions and other lists. The aim is to make sure that the legal entity does not conceal anonymous owners, money laundering or other risks and that the business is transparent and lawful.
For entrepreneurs and holding company owners this is a key point: opening an account for a company or starting to work with a partner bank is impossible without passing KYB. A non-transparent structure, concealed beneficial owners or vaguely described activity are a red flag and grounds for refusal. We help build and present the company’s structure transparently so that it passes the business check successfully.
A case from practice
A holding company owner wants to open a corporate account. The bank launches KYB and requires disclosure of the whole ownership chain down to the ultimate beneficial owners. With a transparent structure and documents prepared in advance, the company passes the check; had the owners been concealed, a refusal would have followed.
Where KYB is applied
- Opening a company account
- Working with partner banks
- Checking counterparties
- Connecting to payment systems
- Disclosing a legal entity’s beneficial owners
- Assessing business risks
03 / What it covers
What KYB covers
What is checked
- The ownership structure
- Type of activity
- Financial history
Beneficiaries
- Ultimate owners (UBOs)
- Founders
- Controlling persons
Checks
- Sanctions lists
- Reputation
- Legal status
Purpose
- No anonymous owners
- No money laundering
- The business is transparent
04 / How it works
How to pass KYB
Gather the company documents
Disclose the structure and UBOs
Evidence the activity and funds
Pass the bank’s check
An account and work with the partner
05 / Key facts
What you need to know
01
KYB is checking a company, the business counterpart of KYC
02
The structure, beneficial owners, activity and reputation are examined
03
It is needed when opening a corporate account and working with a bank
04
The company and owners are run through sanctions lists
05
A non-transparent structure is grounds for refusal
Common mistakes
- Coming to a bank with a non-transparent ownership structure
- Concealing the ultimate beneficial owners (UBOs)
- Not preparing constitutional and financial documents
- Describing the company’s activity vaguely
- Underestimating the strictness of the business check
06 / Expert advice
How to prepare in advance
Before opening a corporate account or starting to work with a bank, the structure is built and documented transparently: the ultimate beneficial owners (UBOs) are disclosed, constitutional documents prepared, the activity clearly described and the source of funds evidenced. The company and owners are checked against sanctions lists. Then KYB goes faster, and the business gains access to financial services.
What we do for you. We help businesses pass KYB: we build and present the company’s structure transparently, disclose the ultimate beneficial owners and prepare the documents and evidence of activity and funds. That way opening an account and working with partner banks succeed rather than running into refusal because of opacity.
Dmitry NagyTax consultant, international taxation and compliance (ex-Big4)
07 / Questions
Frequently asked questions
Know Your Business — the procedure for checking a company as a client, the business counterpart of KYC. The bank or partner establishes what kind of company it is, who owns it and where its money comes from.
KYC checks an individual; KYB a legal entity. KYB additionally examines the ownership structure, the ultimate beneficial owners (UBOs) and the company’s activity.
The ownership structure down to the beneficial owners, constitutional documents, type of activity, financial history, reputation and presence on sanctions lists.
When opening a corporate account, working with a partner bank, connecting to payment systems and checking counterparties.
Because of a non-transparent structure, concealed beneficial owners or vaguely described activity — a red flag. Transparency and full disclosure remove the questions.
Build a transparent structure, disclose the UBOs, prepare constitutional and financial documents and describe the activity clearly. We help do this.
INITIAL ASSESSMENT
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We will design a solution for your case, choose the country and the right status, and take the whole process through to the result.
