What is Know Your Business (KYB)?
The short answer
Know Your Business is the process of establishing the identity of a business, understanding who owns or controls it, and assessing whether a relationship presents unacceptable risk. A useful KYB record connects a legal entity to its registration evidence, ownership information and the decision made about it. Finding a company name is only the beginning: the record must belong to the business you intend to onboard.
Know Your Business (KYB): why it matters
Businesses can trade under names that differ from their registered names. They may also share a name with unrelated entities in other jurisdictions. Resolving the correct legal entity before collecting documents prevents an entire review from being attached to the wrong counterparty. The depth of the review should reflect the relationship, the available evidence and the organisation’s applicable obligations.
How to assess it in practice
Collect the registered name, registration number and jurisdiction. Match those details against an appropriate official source and check the reported status. Examine directors, ownership and control where the source makes them available. Reconcile gaps with other evidence, assess relevant risks and record the reviewer’s decision. Set a review or monitoring trigger so the file does not become a permanent snapshot of an outdated business.
Worked example
A marketplace receives an application from Example Trading. Two registered entities use similar names. The reviewer uses the jurisdiction and registration number to select the right record, then checks whether the applicant’s documents describe that entity. If the ownership declaration conflicts with available evidence, the application is escalated rather than approved simply because a company record exists.
A marketplace receives matching registration details but the applicant cannot demonstrate authority to act. Keep the identity match and pause the separate authority decision.
Distinctions that matter
KYB focuses on a business relationship; KYC focuses on knowing a customer and may include the individuals connected to that relationship. CDD describes the wider due diligence process. These activities overlap, but the terms should not be treated as interchangeable labels for a single database lookup.
Evidence and review output
Review these
- Entity and person identifiers
- Source and document scope
- Authority and unresolved discrepancies
The review should produce
A subject-level decision with each claim marked supported, contradicted or unresolved, plus the owner of any outstanding review.
Across this family
Start with the subject of each claim: legal entity, individual applicant or authorised actor. Keep identity evidence, representation and relationship approval as separate decisions. This prevents one technically successful lookup from being promoted into a broader conclusion it cannot support.
A note from practice
A defensible KYB outcome combines entity identity, applicant authority, ownership and relationship risk. Store the outcome of each check separately so a passed registry lookup cannot conceal an unresolved ownership issue.
Limits and common mistakes
A live registry match does not establish that every statement made by the applicant is true. Active status does not prove solvency, and a shareholder record does not automatically identify the ultimate beneficial owner. Record missing information explicitly. Preserve the source and retrieval date alongside the result so another reviewer can understand what was checked.
Related questions
- What does Know Your Business verification include?
- What is the difference between KYB and KYC?
Frequently asked questions
Is KYB just a company search?
Does active status mean a company is safe?
How often should KYB be refreshed?
Continue learning
Sources & further reading
- LARA Business Entity Search: Michigan company checksUse Michigan’s entity records as a starting point for business identity checks and document review.
Related topics
- Business identity & verificationKnow Your Customer (KYC)Know Your Customer is the process of understanding who a customer is, why they are using a service and what risks the relationship creates. In a business relationship, that understanding can involve both a legal entity and the individuals acting for, owning or controlling it. Identity evidence is an input to the assessment, not a substitute for understanding the relationship.
- Due diligence methodsCustomer Due Diligence (CDD)Customer Due Diligence is the work of establishing a customer’s identity, understanding the relationship and assessing its risks. For a corporate customer, the file often combines company identity, ownership, representatives and an explanation of the intended activity. The aim is an evidence-supported decision that can be reviewed later, rather than a collection of unchecked documents.
- Beneficial ownership & controlUltimate Beneficial Owner (UBO)An ultimate beneficial owner is a natural person who ultimately owns or controls an entity. The immediate shareholder may be another company, so identifying a UBO can require following an ownership chain and examining control separately. A corporate owner should not be presented as the final answer to a question about the people behind a business.
See the registry record behind every answer.
Primary, government-sourced data on 600M+ companies in 200+ countries, with full source attribution.