Know Your Business (KYB)

KYB is the business-side counterpart of Know Your Customer (KYC), which verifies individuals. In US banking, the beneficial ownership rule under 31 CFR 1010.230 requires a covered financial institution to identify and verify the beneficial owners of each legal entity customer when an account is opened. Those owners are any individual who owns 25 percent or more of the entity, plus one individual who controls or manages it.

A KYB check can confirm the entity against its state or national registry, trace ownership through any parent companies to the people behind them, and screen the entity and its owners against sanctions and watchlists. Under OFAC's 50 Percent Rule, an entity owned 50 percent or more in aggregate by blocked persons is itself treated as blocked, so ownership has to be traced, not just the company name checked.