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What is KYB (Know Your Business)?
KYB, or Know Your Business, is the process of verifying that a company is legitimate — confirming its legal existence, ownership, and risk profile — before onboarding it as a customer, vendor, or partner.
In plain terms
KYB is the business-facing counterpart to KYC (Know Your Customer, which verifies individuals). It is a core part of anti-money-laundering (AML) compliance and helps prevent fraud, shell companies, and dealings with sanctioned entities.
A key part of KYB is identifying the ultimate beneficial owners (UBOs) — the real people who ultimately own or control the business — and screening the company and those individuals against sanctions and watchlists.
How it works
- Collect business details — legal name, registration number, address, and structure.
- Verify the company against official registries to confirm it legally exists and is in good standing.
- Identify the ultimate beneficial owners and relevant directors.
- Screen the business and its owners against sanctions, watchlists, and adverse-media sources, and assess ongoing risk.
Key characteristics
- Regulatory requirement — underpins AML and counter-terrorist-financing obligations.
- Ownership transparency — identifies the real people behind a company (UBOs).
- Risk-based — the depth of checks scales with the risk of the relationship.
- Ongoing, not one-time — businesses are re-screened as circumstances change.
Example
Before onboarding a new vendor for payouts, a company runs KYB: it confirms the vendor is a registered business, identifies its beneficial owners, and screens them against sanctions lists — reducing the risk of paying a fraudulent or prohibited entity.
How Payouts.com fits in
Payouts.com applies identity and business verification as part of onboarding recipients and counterparties, so payouts go to verified parties. This supports compliant operations without you stitching together separate verification tools.
Frequently asked questions
What is the difference between KYB and KYC?
KYC (Know Your Customer) verifies the identity of an individual, while KYB (Know Your Business) verifies the legitimacy of a company — its registration, structure, and ultimate beneficial owners. Both support anti-money-laundering compliance.
What does a KYB check include?
A typical KYB check confirms a company’s legal existence via official registries, identifies its ultimate beneficial owners and directors, and screens the business and those individuals against sanctions, watchlists, and adverse media.
Why is KYB required?
KYB helps meet anti-money-laundering and sanctions obligations and reduces the risk of fraud by ensuring you know who you are actually transacting with before money moves.
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