KYB
know your business
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The application of KYC checks to companies and other legal entities, including their ownership and control structure.
For family offices with multi-level structures, KYB is the more demanding part: every level has to be traced back to the natural person.
In practice
KYB covers more than a commercial register extract: articles, governing bodies and authorised signatories, business purpose and actual activity, the ownership and control structure up to the beneficial owners, and the screening of the company and its officers. In family office structures with several levels, these checks are carried out for each entity. A central structure chart prevents the same company from appearing in different files with conflicting information.
Distinctions and common mistakes
KYB is not a separate law but the application of due diligence duties to legal entities; the anti-money-laundering act, supervisory requirements or the rules of the self-regulatory organisation remain decisive. Typical mistakes are outdated register extracts, signatory powers that were never updated and structures in which an intermediate company is skipped without evidence.
Relevant in: EU-wide
Related terms
- KYC
- All the checks with which an institution identifies its clients, establishes their beneficial owners and assesses the risk of the relationship.
- Beneficial owner
- The natural person who ultimately owns or controls a company, foundation or trust, or on whose behalf a transaction is carried out.