# KYB (Know Your Business)

**KYB (Know Your Business) is the due-diligence process a regulated firm uses to identify and verify a business customer: the legal entity itself, the people who act for it, and the natural persons who ultimately own or control it.** In EU law, KYB is not a separate legal term; it is customer due diligence applied to a legal entity.

*Also called:* business verification, corporate KYC, KYC for legal entities.

## Why it matters for PSPs and EMIs

Payment institutions and electronic money institutions are "financial institutions" under the EU Anti-Money Laundering Regulation (AMLR), and therefore obliged entities. Most of their customers in merchant acquiring, business accounts and payouts are companies. For them, KYB is the onboarding process: if it cannot be completed, the firm must not start the relationship.

KYB is also where most of the difficult questions sit: layered ownership, nominee arrangements, directors who are not owners, and registers that disagree with what the customer declares.

## What the law says

- **What must be done.** AMLR Art. 20(1) lists the customer due diligence measures. For a legal entity the core ones are: identify and verify the customer (point a); identify the beneficial owners and take reasonable measures to verify them, so that the firm understands the ownership and control structure (point b); understand the purpose and intended nature of the relationship (point c); verify whether the customer or its beneficial owners are subject to targeted financial sanctions, including control or ownership of more than 50 % by sanctioned persons (point d); understand the nature of the customer's business (point e); determine whether a beneficial owner is a politically exposed person (point g); and verify that anyone acting for the customer is authorised (point i).
- **What to collect about the entity.** AMLR Art. 22(1)(b): legal form and name; registered office and, if different, principal place of business, and country of creation; names of the legal representatives; where available, registration number, tax identification number and Legal Entity Identifier; and persons holding shares or directorships as nominees.
- **Registers.** AMLR Art. 22(7) requires firms to verify beneficial ownership information by consulting the central registers, in addition to other means. Art. 23(4) requires valid proof of registration or a recent register excerpt when a new relationship starts. Art. 24 requires discrepancies with the register to be reported.
- **If KYB cannot be completed.** AMLR Art. 21(1): refrain from the transaction or relationship, terminate an existing one, and consider reporting to the financial intelligence unit (FIU).
- **Timing.** The AMLR applies from 10 July 2027 (Art. 90). Until then, the equivalent duties come from national law transposing Directive (EU) 2015/849 (Art. 13), in Belgium the Law of 18 September 2017.
- **International standard.** FATF Recommendation 10 (customer due diligence) and Recommendation 24 (beneficial ownership of legal persons).

## How ProofVolt handles it

ProofVolt investigates first: company registers, sanctions and adverse media are checked before the customer is asked for anything, and the customer uploads only what public sources cannot prove. The company register is read at the source. Directors and beneficial owners are screened for sanctions and politically-exposed-person status. Where the declared owner is also a director, the two are matched by national register number, never by name alone. Website checks follow fixed rules, not a model's judgement. Each conclusion appears on the case's receipt with its source, and every source, step and decision is kept in an append-only trail.

## Related

- [Customer due diligence (CDD)](/glossary/customer-due-diligence/)
- [Beneficial owner (UBO)](/glossary/beneficial-owner/)
- [Central beneficial ownership register](/glossary/central-beneficial-ownership-register/)
- [KYB for merchant onboarding: what a PSP must verify](/guides/kyb-merchant-onboarding-psp/)

Canonical: https://proofvolt.eu/glossary/kyb/