KYB stands for Know Your Business. It is the check with which a customer, a bank or an insurer verifies who exactly is behind your business, whether that business really exists and whether it operates lawfully. The term comes from the same family as KYC, Know Your Customer, which banks have been applying to individual customers for longer. For business relationships it is called KYB, because an organisation rather than a person is being examined.
A customer does not ask this because he doubts you. Businesses that work with many suppliers must be able to demonstrate that they know who they do business with. This applies when entering into a new relationship, but also periodically with existing suppliers, especially if something changes in the business structure. Banks and insurers request similar information because they are subject to supervision and must be able to show that they know their own customer base.
What a KYB check examines
A KYB check usually consists of a few fixed parts. First, it is established that the business exists and is active, usually via an extract from the trade register. Next, it looks at who the ultimate beneficial owners are, the so-called UBOs: the natural persons who have control or ownership. The customer then checks whether any sanctions or warnings against the business or the persons involved are known, and sometimes questions are also asked about financial position or references. What is asked exactly varies per customer and per sector; there is no fixed, uniform list that applies to everyone.
The detail where many entrepreneurs run into trouble is that the requested documents often need to be slightly older or slightly newer than what is ready in their own administration. A trade register extract from a year ago is accepted by one customer and rejected by another because it is not current enough. The same applies to a UBO declaration: if something changes in the shareholding, the version previously supplied is no longer usable. Anyone who keeps these kinds of documents up to date in one place does not have to search each time which document belongs to which request.
What you do and do not need to provide as standard
A KYB question concerns the identity and structure of your business, not automatically everything else a customer might want to know. A request for a trade register extract or a UBO overview is different from a request for internal financial details or personnel data. If in doubt about what is reasonable to share, it is worthwhile to check what is needed for the specific purpose of the question. On the FAQ page is explained how this distinction is often made in practice.
How often this comes up
Because KYB is not a one-time check but something that customers, banks and insurers repeat periodically, the same question comes up multiple times a year in practice, each time in a slightly different format. That is one of the reasons why entrepreneurs have to fill in the same data again and again, while the underlying facts barely change. In the knowledge base it is explained per concept where it comes from and what the source in the official text is.
No mark of approval, but a file
It is important to emphasize that a KYB check is performed and assessed by the customer themselves. There is no certificate or approval that replaces this check: the customer, the bank or the insurer draws its own conclusion based on the documents provided. What you can do is ensure that the basic documents, current and in order, are ready as soon as the question arrives.
Do you want to know which KYB-related questions frequently come up for your company and which documents belong with them? With the recognition check you can see in a few questions where you stand, and on the page on how it works you can read where the information in the file comes from.