KYB

Definition

Know Your Business (KYB) is the regulatory and due diligence process of verifying the identity, ownership structure, and legal status of a business entity. It is a core element of anti-money laundering (AML) and counter-terrorist financing (CTF) compliance for transactions involving corporate clients.

Why it matters

KYB helps regulated businesses confirm they are dealing with legitimate companies and understand who ultimately owns or controls them. This is critical for detecting shell companies, preventing financial crime, and avoiding regulatory penalties.
In the UK, KYB requirements are covered by the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 and typically complement Know Your Client (KYC) checks.

How KYB works in the UK

1. Entity verification – Confirm company registration details with an official registry (e.g., Companies House).
2. Ownership and control – Identify and verify ultimate beneficial owners (UBOs).
3. Document checks – Review incorporation documents, shareholder registers, and other corporate records.
4. Risk assessment – Evaluate the business’s industry, jurisdiction, and transactional behaviour.
5. Ongoing monitoring – Keep records up to date and watch for changes in ownership or status.

Examples and use cases

• Banks and payment providers – Verifying corporate clients before opening accounts.
• Law firms – Checking business counterparties in commercial transactions.
• Estate agents – Identifying the corporate purchaser or landlord.
• Suppliers – Screening new corporate customers to reduce fraud exposure.

Mini-FAQ

Q: How is KYB different from KYC?
A: KYB is for verifying business entities, while KYC is for verifying individuals. Both processes often work together when a corporate client has individual directors or beneficial owners.

Q: Is KYB required for all businesses?
A: In the UK, KYB is mandatory for regulated firms dealing with corporate clients and for high-value dealers and art market participants. It’s also considered best practice for non-regulated businesses to avoid fraud and reputational risk.