KYB vs KYC: What is the Difference?
In brief: KYC verifies an individual customer, while KYB verifies a business, its ownership, control, activity, and the people behind it.
Key points
- KYC focuses on people.
- KYB focuses on businesses, beneficial owners, controllers, and business purpose.
- Most company clients require both KYB on the entity and KYC-style checks on relevant individuals.
KYB vs KYC
KYC means Know Your Customer. It focuses on identifying and verifying an individual.
KYB means Know Your Business. It focuses on understanding and verifying a legal entity, including what it does, who owns it, who controls it, and whether the activity makes sense.
For UK accountants and law firms, business clients often need both: KYB for the company and KYC-style checks for directors, PSCs, beneficial owners, or other people who control the relationship.
What KYC usually checks
- Full legal name.
- Date of birth.
- Address.
- Identity document.
- Liveness or fraud checks where digital verification is used.
- PEP, sanctions, and adverse media screening where required.
What KYB usually checks
- Company name, number, registered office, and status.
- Trading activity and expected source of funds.
- Directors, partners, trustees, or equivalent controllers.
- Persons with significant control and ultimate beneficial owners.
- Ownership structure and group relationships.
- Business risk factors, including geography, sector, cash exposure, and complexity.
Side-by-side comparison
| Area | KYC | KYB |
|---|---|---|
| Main subject | Individual | Business or legal entity |
| Core question | Is this person who they say they are? | Is this business real, understood, and controlled by known people? |
| Evidence | ID, address, screening, liveness | Registry records, ownership, control, business activity, supporting documents |
| Main risk | Identity fraud or hidden risk in the person | Hidden ownership, shell activity, unusual business model, complex control |
KYB workflow for a company client
- Confirm the company exists and is active.
- Understand what the business does.
- Identify directors and persons with significant control.
- Identify ultimate beneficial owners where the structure is more complex.
- Verify relevant individuals.
- Screen relevant people and entities where required.
- Assess client risk and document the rationale.
- Set review triggers for ownership, risk, or activity changes.
Common mistakes
- Checking the company but not the people who control it.
- Checking directors but ignoring beneficial owners.
- Treating Companies House as complete proof of ownership and control.
- Failing to update KYB when ownership changes.
- Not documenting why a structure is commercially reasonable.
What good looks like
A good KYB file tells a clear story: what the business is, who is behind it, why the firm is acting, what risk factors apply, what evidence was checked, and when the file should be reviewed.
This guide is general information and should be applied through your firm's own AML procedures.