Know Your Business (KYB)
KYC applied to a legal entity - verifying the company itself, its directors, its authorised signatories and, critically, its ultimate beneficial owners.
Definition
Know Your Business (KYB) is the corporate counterpart of KYC: the obligation to identify and verify a legal entity before entering a business relationship and to maintain that knowledge throughout the relationship. KYB is materially harder than individual KYC because it requires unwinding the entity's ownership and control chain - sometimes across multiple jurisdictions and corporate vehicles.
What a KYB file contains
- Certificate of incorporation, articles of association, registry extract (Kbis, Companies House, Handelsregister, etc.).
- List of directors and authorised signatories, individually KYC'd.
- Ultimate Beneficial Owners - every natural person owning >25% or otherwise exercising control, individually KYC'd.
- Group structure chart up to the UBO layer.
- Tax-residency and FATCA/CRS classification of the entity.
- Industry codes (NAF/NACE), licences, and any regulatory authorisations.
Regulatory anchor
KYB obligations sit inside the broader AML directives (AMLD4 onwards) and FATF Recommendation 24 on transparency of legal persons. The EU's upcoming Single Access Point and interconnected UBO registers under AMLR are designed to make corporate transparency a baseline rather than a research project.
Where KYB programmes break
Three recurring failure modes:
- Shell-company stacks - see shell companies - where the UBO is hidden behind nominee directors or trust arrangements in opaque jurisdictions.
- Stale UBO data - registry data is not refreshed after share transfers, leaving compliance with an out-of-date picture.
- Sanctioned-ownership thresholds - the 50% OFAC rule and the EU equivalent require aggregation of indirect ownership, which is rarely done automatically.