In plain words
Imagine renting out a warehouse to a company. You would not just check the name on the letterhead. You would want to know the company is registered, who signs for it, and who is really behind it. KYB is that check, done by a financial firm before it gives a business an account.
A company cannot show a passport or take a selfie, so KYB works in layers. First the firm confirms the business exists, using official registry data. Then it maps who owns and controls it, down to the real people at the top of the chain, the ultimate beneficial owners (UBOs). Finally, it runs KYC on the key people and judges how risky the business and its activity are.
The reason is simple. Companies are a common way to hide who is really moving money. Anti-money laundering (AML) rules in the UK, the EU and most other countries require firms to see through the company to the people behind it. 1 3
How it works
How KYB works
From a company number to the real people behind it.
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1
Confirm the company
Name, registration number, address and status are checked against the official company registry.
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2
Map the ownership
Shareholders, holding companies and trusts are traced until the real people who own or control the business are known.
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3
Verify the people
Directors, UBOs and whoever operates the account go through KYC and screening against sanctions and politically exposed person (PEP) lists.
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4
Assess the business
What it sells, where, to whom and through which countries. The answers set its risk rating, its limits and whether enhanced due diligence is needed.
What a KYB check covers
The exact list depends on your licence holder’s policy and the risk of the business, but a full KYB file usually covers six areas.
Identity of the company
Legal name, registration number, legal form, registered address and whether it is active.
Directors
Who runs the company, with identity checks on the people who matter for the account.
Ownership and control
The ownership chain and the UBOs at the end of it, in the UK usually anyone with more than 25%.
Who can act
The people authorised to open and use the account, and proof they are allowed to.
Business activity
What the company does, expected volumes, countries involved, and any licences its sector needs.
KYC vs KYB
| KYC | KYB | |
|---|---|---|
| Who is checked | One person | A company, its directors and its beneficial owners |
| Main evidence | ID document and selfie | Registry data, ownership structure, KYC on key people |
| Typical time | Minutes, if automated | Minutes for simple companies, days for complex ones |
| Hardest part | Fraudulent or poor-quality documents | Layered ownership, trusts and foreign holding companies |
| Manual review | For exceptions | Common |
A sole trader sits in between: legally the person and the business are the same, so checks look more like KYC with questions about the business added.
KYB in the UK, EU and Gulf
| Market | Where ownership data comes from | What to know |
|---|---|---|
| United Kingdom | Companies House, including its register of people with significant control (PSCs) 2 | Firms must not rely on the register alone, and must report material differences between it and what they find 1 |
| European Union | National company registers and beneficial ownership registers | Access rules for ownership registers differ by country, so data quality and availability vary |
| UAE | Mainland and free zone registrars | Companies must keep beneficial owner records. Mainland and free zone companies sit in different registries |
| Saudi Arabia | Commercial registration data | Local registration data and documents are the starting point; requirements follow Saudi AML rules |
Cross-border structures are where KYB slows down. A UK company owned by a UAE holding company owned by a trust needs evidence from each layer, and no single registry answers all of it.
Example: a marketplace onboards a seller
Nadia runs a small furniture company and signs up as a seller on a marketplace that pays sellers through business wallets.
- Company check. She enters her company number. The registry confirms the company is active, with Nadia as sole director.
- Ownership. The registry shows a holding company with 60% of the shares. The app asks her to upload that company’s share register, which shows Nadia and her brother each own half of it.
- People. Both siblings hold more than 25% indirectly, so both are UBOs. Each completes an ID and selfie check on their phone.
- Review. Because of the extra layer, the case goes to a reviewer, who confirms the structure and approves the account with standard limits for her sector.
- Later. A year on, the brother sells his stake. The change triggers a fresh ownership check.
Common misconceptions
“The company register is enough.”
Registers can be out of date or wrong. Firms are expected to verify what they find, not just copy it.
“Only owners above 25% matter.”
The threshold is a starting point. Someone can control a company through voting rights, agreements or influence without owning a large share, and they count too.
“KYB is just KYC with a company name.”
It is a different workflow, with more manual review, more documents and more people per customer. Products for businesses need to plan for that.
FAQ
What is KYB verification?
KYB, or Know Your Business, is the process of checking that a company is real and legally registered, who its directors are, who ultimately owns or controls it, and what it does, before a financial firm lets it open an account.
What documents are needed for KYB?
Typically the company registration details, proof of its registered address, its ownership structure, details of directors and beneficial owners, and identity checks on those people. Higher-risk businesses may also be asked for licences, contracts, websites or financial statements.
What is the difference between KYC and KYB?
KYC checks one person. KYB checks a company and the people behind it, so it includes KYC on the directors and on the ultimate beneficial owners, plus checks on the business itself.
What is a UBO in KYB?
A UBO, or ultimate beneficial owner, is the real person who ultimately owns or controls a company. In the UK this usually means anyone holding more than 25% of the shares or voting rights, or who controls the company in another way.
How long does KYB take?
A simple company with one owner can be verified in minutes if registry data is available. Complex structures with holding companies, trusts or foreign owners often need a manual review and can take days.
Does KYB need to be repeated?
Yes. Firms must keep business customer information up to date, and re-check when directors or owners change, when the business starts doing something different, or when its activity looks unusual.
Sources
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1
LG
legislation.gov.uk The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
https://www.legislation.gov.uk/uksi/2017/692/contents -
2
GU
GOV.UK People with significant control (PSCs)
https://www.gov.uk/guidance/people-with-significant-control-pscs -
3
F
FATF Financial Action Task Force
https://www.fatf-gafi.org/
