Know your business (KYB)
Also known as: KYB, business verification, know your business customer, beneficial ownership verification, UBO verification
Know your business (KYB) is the process of verifying a company before a bank or payment provider works with it: confirming the business is real, identifying who ultimately owns and controls it, and checking for sanctions and money-laundering risk.
While KYC checks a person, KYB has to look through layers of companies to find the humans behind them. That's exactly where shell companies try to hide.
Know your business (KYB), explained at three levels
At home
Before a bank lets a company open an account, it checks that the company is real and finds out who's actually behind it. That's KYB. It's the business version of the ID check you go through when you open a personal account.
At work
If your business applies for a merchant account or business bank account, expect KYB questions: incorporation documents, business address, what you sell, and the names of owners and directors. Having these ready speeds up approval.
At home
The key idea in KYB is the 'beneficial owner,' the real person who owns or controls the company, often defined as anyone with 25% or more ownership or significant control. If a company is owned by another company, the bank keeps digging until it finds people, not just more companies.
At work
A KYB process typically verifies registration with government registries, confirms directors and beneficial owners, runs KYC on those individuals, screens against sanctions and politically exposed person lists, and assesses business risk by industry and geography. Ongoing monitoring flags changes in ownership or activity that could signal a problem.
At home
Shell companies are often built in layers across several countries, so the same person may hide behind four or five entities. In my view, KYB is only as good as the registries it relies on, and many registries don't verify what's filed. That's why investigators often find the real owners through leaks, not official records.
At work
KYB at scale relies on registry data APIs, document verification, entity resolution across jurisdictions, and risk-based review queues. The policy landscape keeps shifting: the EU created a new Anti-Money Laundering Authority in Frankfurt under its 2024 AML package, Canada expanded its beneficial ownership regime, and the US narrowed its reporting rule in 2025. Firms should design KYB to adapt to rule changes, rather than hard-coding one country's thresholds.
Real-world examples
At home
Thomas started a small consulting company and applied for a business account. The bank asked for his articles of incorporation and confirmation that he was the sole owner. Because he had everything ready, the account opened in two days.
At work
Nadia runs onboarding at a payments startup. A new merchant was owned by a holding company in one country, which was owned by a trust in another. KYB checks couldn't identify a real owner, so Nadia's team declined the application, a decision their compliance lead later called the right one.
How it compares
| feature | Know your business (KYB) | Know your customer (KYC) |
|---|---|---|
| Who is checked | A company and the people who own or control it | An individual |
| Key documents | Incorporation records, ownership charts | Government ID, proof of address |
| Main risk | Shell companies hiding real owners | Identity theft and fake identities |
| Complexity | Often multiple layers and countries | Usually one person |
| Relationship | Includes KYC on owners and directors | Stands alone |
KYB extends KYC from people to companies, then back to the people behind them.
For analysts
KYB is where onboarding speed and compliance collide. I'd map every manual step in your KYB process and find the ones caused by missing data, not genuine risk. Fixing data collection upfront usually cuts approval times more than any new tool.
History & origin
KYB grew out of anti-money-laundering rules that, for decades, focused mainly on individual customers. The Financial Action Task Force strengthened its guidance on beneficial ownership over the 2010s and revised its standard on transparency of legal persons in 2022. The 2016 Panama Papers leak showed how easily shell companies hid owners, which pushed governments to create ownership registries. Canada began requiring federally incorporated companies to file information on individuals with significant control with Corporations Canada, and launched a public registry in January 2024. The US Corporate Transparency Act required beneficial ownership reports, but in March 2025 FinCEN exempted US-formed companies, narrowing it mostly to foreign entities. In my opinion, KYB remains far weaker than it should be, because registries still mostly rely on companies telling the truth about themselves.