KYB verification: 7 checks, their evidence and who decides

Q: What is KYB verification?

KYB verification is the step of know your business in which a firm confirms, from sources independent of the customer, that a business customer exists and is active, who runs it, who owns and controls it, and whether any of them is sanctioned or politically exposed. A KYB check is another name for the same step.

Q: What information is checked during a KYB process for a limited company?

Seven things: the company's existence and status, its legal form and the powers that bind it, its registered office and principal place of business, its directors and senior managers, its owners and controllers, and screening of the entity and every person named. The file then records the decision with each source and its date.

Q: How does KYB verification work for beneficial ownership?

The firm follows the ownership chain until it reaches the natural persons who own or control the company, then verifies each one. Registers help, but in the UK registrar filings alone never verify the owners, while a US bank may rely on the customer's own declaration unless it knows of facts that would reasonably call it into question.

Q: What happens if the registry and the customer's documents disagree?

The analyst resolves the gap with the customer before onboarding. Where the gap concerns the owners, a UK firm reports a material discrepancy to Companies House. From July 2027 an EU firm reports it to the central register within 14 calendar days, except in the cases that Article 24(2) of the EU regulation lists.

Q: What happens when a KYB check fails?

The file does not pass as it stands: the firm refers it to enhanced due diligence or declines the customer, and records the reasons with each source's date. Who approves the outcome is set by the firm's policy, and the KYC risk rating sets the date of the next review.

Q: What does a KYB refresh recheck?

A refresh rechecks what has changed since the last review: status, constitution or signatories, addresses, directors, ownership and control, and the screening results after list updates. It runs on the review date the risk rating sets, or sooner when a change shows up.

A registry extract on file does not make a business customer verified; the checks below do. The guide to KYB and UBO verification runs five stages, from the entity to monitoring, and the seven checks here sit in the first four.

What is KYB verification, and is it the same as a KYB check?

Yes. Both names mean one step of know your business, the wider program. Take a UK limited company (illustrative) applying with a Companies House extract printed in March: before you call its file verified, three things must hold.

Independent source. UK rules: "a reliable source which is independent" of the person (MLR 2017 reg 28(18)(a)); EU rules: "a reliable and independent source" (Directive (EU) 2015/849, Art 13(1)(a)).
Every fact matched against the application.
A record of each fact's source and date.

A Companies House extract that the customer emails over still counts as independent evidence of the company's name, number and registered office, because the UK rules treat documents from an official body as independent whoever hands them over, but it proves those facts only as of the day it was issued and never, on its own, who owns the company.

What does a KYB check verify?

Seven checks, with the information collected for each:

Table 1. The seven KYB checks, stage by stage (as of October 2026). Who decides follows a common split; the firm's policy names the roles.

Check	Input	Output, and when it fails	Who decides	Rechecked when
1. Existence and status	Registry extract from the place of incorporation, with its issue date; registration number	Active, with name, number, legal form, incorporation date. Fails: dissolved, struck off, in liquidation, mismatch	Analyst	Status change; review date set by the risk rating
2. Legal form and powers	Articles or other constitution, partnership agreement, board resolution	Who can bind the company. Fails: signatory without authority	Analyst	Change of constitution or signatories
3. Addresses	Registered office and principal place of business, from the registry and one independent source	Both recorded, an agent's address explained. Fails: a PO box registered office (UK, since 4 March 2024)	Analyst	Change of address
4. Officers and senior management	Register of directors; the application	Each person named; the person acting has authority (reg 28(10)). Fails: a director missing from the register	Analyst; discrepancy reported where the law requires	Change of directors
5. Owners and controllers	Shareholder and PSC registers, beneficial ownership register, the customer's declaration	The natural persons who own or control it. Fails: no natural person reached	Analyst; senior approval where EDD applies	Change of ownership or control
6. Screening	Entity name, every officer and owner	Sanctions, PEP and adverse media results resolved. Fails: unresolved true match, or owned by a listed person	Analyst; MLRO for a true match	List updates; ownership change
7. Decision and record	The file	Approve, refer to enhanced due diligence, or decline, with reasons and each source's date. Fails: a step with no record	The approver the policy names	The review cycle set by the risk rating

Rows 1 to 3 follow FATF's list for a legal person, from proof of existence to the principal place of business (INR.10 para 5(a) of the FATF Recommendations, June 2026 text). In the UK, rows 2 and 4 rest on reg 28(3)(b) and (10).

Row 5 follows FATF's cascade to the natural persons behind the company (para 5(b)). Row 6 is KYB screening of the entity and every person found, so PEP screening covers directors and owners.

What can software automate in KYB verification?

Software, in house or from a business verification service, helps most with registry pulls, field matching and rescreening; a person still judges who may sign, whether a discrepancy is material and the outcome. complead, formerly Sanction Scanner, can verify a company and every owner behind it: it confirms the entity against official registers, shows where each field came from and reports unresolved ownership layers as unresolved.

Screen the company and every name the register gives you.

Row 6 runs on the entity and on each director and owner the earlier checks found. Type any of those names, company or person, into complead's free Sanctions Check. Four lists are searched (OFAC SDN, UK financial sanctions, EU, UN Security Council); matches appear on screen and the full report follows as a PDF by email.

Screen a company name free

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Which documents and data count as evidence in KYB verification?

Evidence counts when it is independent of the customer and you can date it:

A dated register extract or certificate. From 10 July 2027 an EU firm collects, for an entity in a beneficial ownership register, proof of registration or "a recently issued excerpt of the register" (AMLR, Regulation (EU) 2024/1624, Art 23(4)); from 31 July 2028 the EU Company Certificate is "sufficient evidence, at the time of its issuance" of a company's incorporation and registered details (Directive (EU) 2025/25).
The constitution and the register of directors, matched against the application.
Shareholder and PSC registers. In the UK, registrar filings alone never verify the owners (reg 28(9)).
Registration and tax numbers and the Legal Entity Identifier, where available (AMLR Art 22(1)(b)(iii)).
The customer's declaration. A US bank may rely on it for the owners unless it knows of facts that would reasonably call it into question (31 CFR 1010.230(b)(2)).

Is KYB verification required by law?

Yes, wherever AML due diligence rules cover a business customer:

FATF. Recommendation 10, with INR.10 para 5 listing what to verify for a legal person.
EU today. Directive 2015/849 Art 13(1)(a), (b). The 6AMLD (Directive (EU) 2018/1673) covers money laundering offenses in criminal law and sets no due diligence duty.
EU from 10 July 2027. AMLR Arts 22 to 24: what to obtain and verify, by when, and discrepancy reports.
UK. MLR 2017 reg 28; reg 30A for the register excerpt and discrepancy reports.
US. 31 CFR 1020.220 for banks: name, a physical address, a US entity's taxpayer identification number, and documents or non documentary checks showing it exists; 1010.230 adds each owner at 25 percent or more and one controller.
Singapore. MAS Notice 626 (last revised 30 June 2025) para 6.9: banks verify a legal person's "legal form, proof of existence, constitution and powers" from "reliable, independent source data, documents or information".

What did 2026 change in KYB verification?

30 June. UK credit institutions may collect an insolvent bank customer's register excerpt after the relationship starts (reg 30A(8A)).
14 August. Under FinCEN's final rule, US companies no longer file beneficial ownership reports, while covered financial institutions keep their "continuing obligation" under the 2016 CDD Rule (1010.230).
16 September. The Insolvency Service won its first identity verification convictions: three UK directors fined.
30 September. AMLA published its final report on the due diligence standards of AMLR Art 28(1), to be submitted to the European Commission for adoption.
End of 2026 at the earliest. Companies House plans to complete the transition for existing directors and PSCs; new ones have had to verify since 18 November 2025.

Next: the AMLR on 10 July 2027; Directive 2025/25 transposed by 31 July 2027.

What are the common challenges in KYB verification?

Three illustrative files show where checks break.

A company struck off last year and restored this spring shows active on a fresh extract; only its filing history shows the gap, which the analyst asks about.

An application names two directors and the register shows one. The analyst resolves it with the customer before onboarding. If the gap is in the owners, a UK firm reports a material discrepancy to Companies House (reg 30A(2)). From July 2027 an EU firm reports it to the central register within 14 calendar days (AMLR Art 24(1)), except in the cases Art 24(2) lists.

A forged certificate is caught by looking up its number at the registry and comparing the name and officers.

A failed file goes to enhanced due diligence or is declined, and the KYC risk rating sets its next review.

What is the difference between KYB and KYC verification?

KYC verification proves that a person is who they claim to be, from an identity document or electronic identification. KYB verification proves that a business exists, who runs it and who owns it, and then runs KYC verification on the people it finds. The March company passes the entity checks once. Its directors, and every owner the cascade reaches, go through the person checks.

Who needs to perform KYB verification?

Every firm under due diligence rules that takes on business customers: financial institutions (Recommendation 10), virtual asset service providers (Recommendation 15) and designated non-financial businesses and professions such as lawyers, accountants and trust and company service providers (Recommendation 22).

Why the checks are important is in INR.10 para 5: their first purpose is "to prevent the unlawful use of legal persons and arrangements", their second to mitigate the risks found. A marketplace's merchants are business customers too. In Türkiye, the ecommerce company Hepsiburada selected complead Fusion to screen its merchants against sanctions and PEP lists at onboarding and to rescreen them daily.

The March applicant's file now holds a fresh extract with its date, the directors matched to the register, the owners confirmed from a second source, every name screened and a recheck date. Between those dates, ongoing monitoring watches for change.

Related terms

Know your business (KYB). The whole program for business customers, from the first application to monitoring; verification is one step of it.
Ultimate beneficial owner. The natural person who ultimately owns or controls a company.
KYB onboarding. The flow that takes a business customer from application to an open account.
KYC verification. The checks that prove an individual is who they claim to be.
Enhanced due diligence. The deeper checks a higher risk business customer gets.
Ongoing monitoring. The watch on a customer's file and transactions for as long as the relationship lasts.

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How this entry was checked. Dilara Diker, Head of Compliance, is the fact checker of this entry and compares each rule and date in it with its source; Minhac Celik, Marketing Advisor at complead, is its author. Last reviewed: 28 October 2026. The texts behind the page were opened on 28 October 2026: FATF Recommendation 10 and its interpretive note (June 2026), Directive (EU) 2015/849, Regulation (EU) 2024/1624 (Articles 22 to 24), Directive (EU) 2025/25, the UK Money Laundering Regulations 2017 (regulations 28 and 30A, as in force on 30 June 2026), the Companies House transition plan updated on 23 October 2026, the Insolvency Service release of 17 September 2026, 31 CFR 1020.220 and 1010.230, FinCEN's beneficial ownership rule of August 2026, AMLA's final report of 30 September 2026 and MAS Notice 626 as last revised on 30 June 2025. The March company and the three challenge files are illustrative.

KYB verification: 7 checks, the evidence and who decides

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