KYB / KYC
KYB AND THE BUSINESS-TO-BUSINESS ENVIRONMENT
The use of the KYB (Know Your Business) term, or BKYC (Business Know Your Customer), is relatively recent. The demand for these types of solutions has skyrocketed due to the announcement of various regulations in many states around the world that force its implementation.
As a result, the digitalisation of processes and delocalisation of them has caused companies that offer products and services to consumers or other companies (B2B) to establish Know Your Business procedures.
In developing these processes it was important for businesses to keep in mind methods to reduce costs and the time taken on these administrative procedures. It is important to consider how to simplify previously tedious and complex processes, while ensuring that relations with any B2B clients are protected, and have adequate legal support, while developing internal compliance policies and broadly regarding relationships with customers and suppliers.
Know Your Customer (KYC), corresponds to the process carried out by certain companies to identify and verify the identity of their customers in a compliant way with regulations in force.
These processes are designed to fight money laundering, terrorist financing, tax crimes and phishing by registering a user as a customer of a company.
WHAT DOES KNOW YOUR BUSINESS (KYB) REALLY MEAN?
KYB (Know Your Business) processes shares all of the features we have seen in defining the KYC process. The difference with KYB lies in the user to identify the business. While in the standard process potential clients or users are identified to register them in a company, Know Your Business processes are where the person responsible, or legal representative of a business is identified.
Most B2B (Business-to-Business) companies need to carry out due diligence to identify the businesses they work with, and fight money laundering, and other tax crimes, in addition to ensuring that they work with organisations on security, and guarantees. In the great majority of cases, primarily in the financial sector, KYB is a mandatory requirement of legal compliance.
Companies that offer professional services to other companies, or those that constantly work with SMEs and freelancers must establish KYB procedures to identify the legal representatives of these businesses, and verify their connection with the client company.
Source: https://www.electronicid.eu/en/blog/post/know-your-business-kyb/en
PIPezi undertake a Know your Business process to identify Business Owners and decision makers before onboarding onto the trading platform.
The process will be kept as simple and affordable as possible. It also allows Businesses to trade under their business name, while receiving support from the PIPezi team.
PIPTLE Wealth Management Pty Ltd Trading as PipEzi KYB Process
Which Documents are Required for KYB
The set of required documents for a particular jurisdiction is stipulated by the anti-money laundering laws that are applicable in that jurisdiction.
1. A document confirming the legal existence of the company, such as:
- a certificate of incorporation/registration;
- a recent excerpt from a state company registry;
- a certificate of incumbency;
- a certificate of good standing;
- a memorandum/articles of incorporation/association/registration;
- other similar documents;
2. A document enabling the identification of all the UBOs of a company, such as:
- the shareholder registry;
- a statement of information;
- a recent excerpt from a state company registry;
- a certificate of incumbency;
- a memorandum/articles of incorporation/association/registration;
- a trust agreement; other similar documents.
Requirements for the Documents
The provided documents must, in any event, contain the company’s name, registration number, legal form (type), address, and the date of incorporation.
If the entity has several corporate layers, i.e. intermediary holding companies, the relevant documents should be provided in respect of each company.
Bank statements are NOT usually accepted as confirmation of UBO status.