KYB — Business Verification: Complete Guide for Consultants & Lawyers
KYB (Know Your Business) is due diligence for legal entities — companies, cooperatives, foundations. More complex than KYC for natural persons, it requires a specialist approach to uncover UBOs and complex corporate structures.
KYB vs KYC: What Is the Difference?
KYC (Know Your Customer) concerns the identification of natural persons: identity, address, occupation, source of income. KYB (Know Your Business) concerns the identification of legal entities: companies, LLCs, SAs, IKEs, cooperatives, foundations. It is significantly more complex because: • Behind every company there are natural persons (UBOs) who must be identified • Corporate structures can be multi-layered (holding→subsidiary→sub-subsidiary) • Legal entities can change their structure quickly • Different jurisdictions have different levels of transparency
Step 1: Legal Identification of the Company
The core documents for every Greek company: • Company registry certificate (GEMI) — recent, within 3 months • Articles of association (latest version) • Certificate of representation / Government Gazette publication of Board appointment • Company tax number (AFM) • Official registered address (proof of registered office) For foreign companies: • Equivalent documents from the country of origin • Official translation (sworn translator if from a non-EU country) • Certificate of Good Standing (if from a common law country)
Step 2: Identifying the Ultimate Beneficial Owner (UBO)
This is the most critical and difficult step. A UBO is every natural person who: • Directly or indirectly owns >25% of share capital or voting rights • Controls the company by other means (e.g. via contract or administrative position) Identification steps: 1. Check the Central Beneficial Owners Registry (gov.gr) 2. Analyse the company's shareholder register 3. If a shareholder is a company → repeat the process for that company (look-through) 4. For offshore entities: check additional sources (PressFeed, World-Check, OpenCorporates) 5. If unable to identify UBO → high risk + EDD
Step 3: Risk Assessment of the Legal Entity
Risk factors for a company: High risk: • Registered in a FATF high-risk jurisdiction (e.g. BVI, Cayman, Marshall Islands) • UBO is a PEP or connected to a PEP • Complex multi-layered structure without commercial justification • Nominee shareholders/directors • History of adverse media • Activity in high-risk sectors (gambling, crypto, arms) Low risk: • Listed on a regulated market (e.g. Athens Stock Exchange, LSE) • Well-known Greek company with transparent structure • Public enterprise or NPDD
Common KYB Errors Found by Auditors
1. No look-through on corporate shareholders: If Company A is owned by Company B, you must also examine Company B to find the ultimate UBO. 2. Relying solely on the UBO Registry: The Registry may not be up to date. Always verify with additional sources (articles of association, shareholder register). 3. Outdated documents: A GEMI certificate that is 2 years old is not acceptable. Always request a recent one (within 3 months). 4. Undocumented search: Even if you find no problem, document WHERE you looked, WHEN and what you found.