š¹ Definition
Business Verification is the process of confirming the legal existence, structure, and legitimacy of a company or organization. It is a core component of Know Your Business (KYB) procedures and is commonly used by financial institutions, fintech platforms, corporate service providers, and regulatory bodies to assess the risk of doing business with a corporate customer.
The verification process typically involves reviewing official registration documents, confirming the company’s registration status with government authorities, identifying Ultimate Beneficial Owners (UBOs), and validating key company information such as name, registration number, address, and directors.
š¹ Frequently Asked Questions (FAQs)
Q1: What documents are required for business verification?
Typical documents include:
- Certificate or Articles of Incorporation
- Business registration or license
- Company Constitution or Memorandum & Articles of Association (M&AA)
- Recent utility bill or bank statement showing registered address
- Identification documents of directors and UBOs
Q2: How is business verification different from KYC?
KYC (Know Your Customer) focuses on verifying individual customers, while business verification (part of KYB) applies to entities such as corporations, partnerships, and trusts. Business verification includes additional layers such as ownership structure and corporate control.
Q3: Why is business verification important in AML/CFT compliance?
It helps prevent financial crime, including the use of shell companies or front companies for money laundering, terrorist financing, or fraud. Regulatory bodies require institutions to verify business customers before establishing a relationship.
Q4: Can business verification be automated?
Yes. Many RegTech and compliance platforms offer automated KYB solutions that connect to global business registries, sanctions lists, and UBO databases to instantly verify business entities and flag risks in real time.
