Know Your Business: KYB Meaning and AML Checks
In brief: Know Your Business is the process of understanding and verifying a business client, including its activity, ownership, control, risk, and relevant people.
Key points
- KYB checks the business; KYC checks the individual.
- Company clients often require both KYB and KYC-style checks on relevant people.
- A KYB file should explain the business model, ownership, control, screening, risk rating, and review date.
What does Know Your Business mean?
Know Your Business, often shortened to KYB, means understanding and verifying a business client before and during a relationship. It covers the entity, its trading activity, ownership, control, beneficial owners, risk factors, and the people who act for it.
For UK accountants and law firms, KYB is not just checking that a company exists. A dormant shell, complex ownership chain, or client with unclear source of funds may exist on a register and still create AML risk.
What to check in KYB
- Legal name, company number, registered office, and status.
- Directors, partners, trustees, or equivalent controllers.
- Persons with significant control and ultimate beneficial owners.
- Business activity and expected transactions.
- Countries, sectors, and delivery channels.
- Source of funds and source of wealth where risk requires it.
- PEP, sanctions, and adverse media exposure.
KYB vs KYC
| Area | KYB | KYC |
|---|---|---|
| Subject | Business or legal entity | Individual |
| Core risk | Hidden ownership, shell activity, unusual business model | Identity fraud, PEP exposure, sanctions, personal risk |
| Evidence | Registry records, ownership, activity, control, documents | ID, address, liveness, screening |
What good KYB looks like
A good KYB file tells a short, clear story: this is the business, this is what it does, these are the people behind it, this is the risk, these checks were completed, and this is why the firm accepted or declined the work.
This guide is general information and is not legal advice.