Know your business

Spec sheet // Glossary // KYB
Glossary / K / Know your business
Glossary · KYC and identity

Know your business

KYBAlso called business verification, corporate due diligence

Definition

Know your business is the process of verifying a company customer. A firm confirms the entity exists, checks its registration and status, identifies its directors and traces its ultimate beneficial owners. It is the corporate side of customer due diligence and applies when banks, payment firms and platforms onboard merchants or business clients.

COMPANY CUSTOMERDIRECTORSSHAREHOLDERSULTIMATE OWNER
Fig. 1 · Know your business
MLR 2017 regulation 28 · ECCTA identity verification · FinCEN CDD Rule
Key rulesMLR 2017 regulation 28 · ECCTA identity verification · FinCEN CDD Rule
Applies toUK relevant persons onboarding corporate customers
RegionsGlobal · UK · EU · US
01

How it works

The firm pulls the company's record from the official registry, confirms its number, address and status, and collects its constitution and ownership chart. It identifies directors and anyone holding more than 25% and verifies them as individuals. It screens the company and each person against sanctions, PEP and adverse media lists, then rates the risk.

Businesses move larger sums than individuals and can hide owners behind layers. Corporate registers help but are not definitive. UK rules require firms to report material discrepancies between their findings and Companies House. Identity verification of directors at Companies House became mandatory from 18 November 2025.

Step 1Registry checkConfirm company number, status and address in registry
Step 2Map ownershipBuild the ownership chart to natural persons
Step 3Verify peopleVerify directors and owners holding more than 25%
Step 4ScreenScreen entity and people for sanctions and PEPs
02

The rules

UK · 26 June 2017MLR 2017 regulation 28Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, regulation 28

Requires firms to obtain company name, number, registered office, directors and beneficial owners, and to understand ownership and control.

UK relevant persons onboarding corporate customers
UK · 18 November 2025ECCTA identity verificationEconomic Crime and Corporate Transparency Act 2023, identity verification at Companies House

Requires new and existing directors and PSCs to verify their identity with Companies House.

Directors and persons with significant control of UK companies
US · 11 May 2018FinCEN CDD RuleCustomer Due Diligence Requirements for Financial Institutions (31 CFR 1010.230)

Requires identification and verification of beneficial owners and a control person for legal entity customers.

US banks, broker-dealers, mutual funds, futures firms
03

Common questions

What is the difference between KYB and KYC?

KYC verifies individuals. KYB verifies a business, including its legal existence, its directors and its beneficial owners. KYB includes KYC checks on the individuals behind the company.

Can a firm rely on a company register for KYB?

Registers are a starting point. UK rules say firms should not rely solely on the register, and firms must report material discrepancies they find between their own information and Companies House records.

How often is KYB refreshed?

Firms refresh on a risk basis, through periodic reviews and when triggers occur, such as a change of directors, ownership or activity. High-risk businesses are reviewed more often.