KYB (Know Your Business)
Also known as: Business verification · Beneficial ownership · Ultimate beneficial owner · UBO
Verifying a company before doing business with it — that it exists and actually operates, who controls it, and which individuals ultimately own it.
Legal basis
31 CFR 1010.230 (beneficial ownership requirements)
KYB is KYC applied to legal entities, with one extra question. Confirming that an LLC or corporation is registered and in good standing is not enough; you need to know who is behind it. A company can have flawless paperwork and still be a shell controlled by someone who appears nowhere in its filings.
For US financial institutions, FinCEN's customer due diligence rule defines the beneficial owners to identify: each individual who directly or indirectly owns 25% or more of the equity, plus one individual with significant responsibility to control or manage the company, such as a CEO or managing member. The institution must collect and verify them at account opening.
There is no government registry to lean on for domestic companies. FinCEN's March 2025 interim rule exempted US companies and US persons from beneficial ownership reporting under the Corporate Transparency Act, and a final rule made that permanent in August 2026; only foreign companies registered to do business in the US still report. Verification is the institution's own job — cross-checking registrations, officers, ownership chains, sanctions and litigation, and the connections that give a shell away: the same agent behind dozens of entities, the same address, the nominee officer.
Frequently asked questions
What is a beneficial owner?
Under FinCEN's customer due diligence rule, each individual who owns 25 percent or more of a legal entity's equity, directly or indirectly, plus one individual with significant responsibility to control, manage or direct it.
Do US companies still have to file BOI reports?
No. FinCEN exempted domestic companies and US persons from beneficial ownership information reporting in March 2025 and made the exemption permanent in August 2026. Foreign entities registered to do business in the US must still report.