Know Your Business service

Checks that we do

In accordance with Article 10 of the 2012 FATF AML Recommendations, legal entities must be identified in the following manner:

(a) Identifying and verifying the entity using reliable, independent source documents, data, or information;

(b) Identifying the beneficial owner and taking reasonable measures to verify the identity of the beneficial owner, such that the financial institution is satisfied that it knows who the beneficial owner is; this also includes understanding the ownership and control structure of the entity.

Know Your Business (KYB) service

We provide identification and verification of legal entities who are customers to our clients to assist their KYB process. In order to identify and verify the entity, we usually collect the required information about the entity, such as business name, type of label entity, registry code, details and address of the entity, as well as names of entities managers and owners (UBOs). This information may be provided via an officially-issued document or questionnaires. This flow is fully customisable and depends on the client's requirements.

The provided information is subject to screening against government databases where available and sanction lists, PEPs lists and other databases if it is included in scope of service.

Types of KYB services available

• FULL KYB level includes verification of legal existence, details, ownership, and control structure through analysis of corporate documents and review of corporate registries, where available, according to the client's requirements or to Sumsub default.
  
  Sumsub performs this check. If you would like to make a final decision, please write to [email protected].
  
  
• Сorporate documents without structure level includes the confirmation of the company's legal existence and details of legal entity through analysis of corporate documents and review of corporate registries, where available.
  
  Sumsub performs this check by default requirements or client’s requirements. If you would like to make specific requirements for that check, please write to [email protected].
  
  
• AML + Autocheck + Corporate structure level includes automated checks against sanctions lists, watchlists, blacklists, adverse media (OFAC, UN, HMT, EU, DFT, etc.), automated verification of the company details (company name, registration number, etc.) and check of the ownership and control structure of a given legal entity through government corporate registry databases and other public records, where available.
  
  Sumsub doesn’t match the attached KYC profiles with captured data from government corporate registry databases and other public records. We automatically delegate such applicants to the client.
  
  Analysis of potential match results is performed by the client’s team.
  
  
• The AML + Autocheck level includes automated checks against sanctions lists, watchlists, blacklists, adverse media (OFAC, UN, HMT, EU, DFT etc.) and automated verification of the company details (company name, registration number, etc.) of a given legal entity through government corporate registry databases and other public records, where available.
  
  The client's team performs the analysis of potential match results.
  
  
• The AML level only includes automated checks against sanctions lists, watchlists, blacklists, adverse media (OFAC, UN, HMT, EU, DFT etc.).
  
  The client's team performs the analysis of potential match results.
  
  

These checks do not make any final decisions on whether to onboard a given legal entity. Such decisions are made by the Customer at their own discretion.

The average time of completing the FULL KYB checks with the involvement of Sumsub team normally does not exceed 10 hours. In rare cases, the verification could take up to 72 hours.

The average time of completing automated checks normally does not exceed 3 minutes.

Legal entities’ check

In order to identify and verify the entity under the applicable laws, Sumsub usually collects the following information about the entity:

1. the name or business name of the entity;
2. the registry code or registration number and the date of registration;
3. the names of the director, members of the management board or other body replacing the management board, and their authorization in representing the legal person;
4. the other details of the entity in accordance with the client’s request;
5. the ultimate beneficial owner.

Identification of the ultimate beneficial owner

For KYB purposes, a beneficial owner is the individual who ultimately owns or controls a legal entity through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that person, including through bearer shareholdings, or through control via other means.

Direct ownership is a manner of exercising control whereby the beneficial owner holds a shareholding of 25 (in some jurisdictions, 10) percent plus one share or an ownership interest of more than 25 (in some jurisdictions, 10) percent in a company.

Indirect ownership is a manner of exercising control over a company through another company or multiple companies in the same proportion. Where, after all, possible means of identification have been exhausted, the beneficial owner cannot be identified, and there is no doubt that such a person exists, or where there are doubts as to whether the identified person is a beneficial owner, the natural person who holds the position of a senior managing official is deemed as a beneficial owner. We identify and verify the ultimate beneficial owner as an individual.

Required documents

By default, Sumsub requests a bundle of documents that confirm the legal existence and corporate details of the company and enable establishing the ownership and control structure.

Until the Questionnaire is completed, Sumsub will perform KYB verification following the rules below. Please see the Questionnaire here.

• certificate of incorporation/registration;
• recent excerpt from a state company registry;
• certificate of incumbency;
• certificate of good standing;
• articles of incorporation /association / registration;
• memorandum of association / bylaws;
• statement of information;
• partnership agreement.

The provided documents must, in any event, contain the company's name, registration number, legal form (type), address, and date of incorporation.

The documents Sumsub normally accepts in order to establish the beneficial ownership and control structure of a legal entity include:

• recent excerpt from a state company registry;
• recent excerpt from a UBO registry;
• certificate of incumbency;
• shareholder/member registry;
• director registry;
• operating agreement;
• statement of information;
• articles of incorporation / association / registration;
• memorandum of association / bylaws;
• partnership agreement;
• trust agreement / deed;
• declaration of trust.

Where one of the above documents cannot be provided for reasons related to jurisdictions or legal entity types, an analogous document is requested as an alternative by default.

Corporate document verification within the full KYB process

To ensure KYB checks and reduce these risks, the verification of corporate documents includes the following steps:

• first of all, the documents undergo automated checks for modifications in graphic editors and all sorts of similar tampering;
• all the provided documents are reviewed manually by our compliance team and checked for any internal inconsistencies, deviations from standard templates (where available), missing data, etc.;
• company details are cross-checked against publicly available state registries and other independent databases (where possible).

To ensure that Sumsub conducts due diligence of legal entities (KYB) in accordance with your company's AML policy and procedures, we require completing the Questionnaire before proceeding. Completing the Questionnaire will help meet regulatory compliance requirements and enhance the usability of Sumsub for you and your customers.

Acceptability criteria for required documents

By default, Sumsub accepts documents with the following criteria:

• documents disclosing beneficial ownership and control structure of a legal entity issued no more than 12 months prior to verification or the most recent according to the publicly available state registry, and specific documents regardless of the date of issue in case they include validity period, e.g., Power of Attorney, or in case they are issued for an unlimited period of time (until recall), e.g., Trust Agreement, Trust Deed, Memorandum and Articles, etc.;
• documents intended to confirm legal existence and corporate details issued no more than 12 months prior to verification or the most recent according to the publicly available state registry;
• documents in all languages may be accepted so long as the document is presented in the OCR format;
• plain copies of uncertified, non-notarized and non-apostilled documents;
• e-documents / documents generated in electronic form;
• photos of documents (screenshots of documents are not acceptable);
• black and color scans of documents;
• documents with handwritten signatures and e-signatures created using digital signature service providers;
• Sumsub doesn’t validate signing certificates;
• Sumsub doesn’t accept internal forms or structure charts related to UBO status as sufficient proof of ownership;
• shareholder / member / director registries, certificates of incumbency, and other similar documents if they are issued by a state company register or signed by a registered agent, another independent third-party organization, or a natural person, such as the public notary, solicitor, etc. If there are no such documents, Sumsub can accept shareholder / member / director registries, extracts from a state registry, certificates of incumbency, and other similar documents if they are signed by the company's director or secretary and, if possible, feature the company's seal.

Confirmation of ownership and control structure

By default, Sumsub uploads printouts/screenshots or extracts corporate documents from the state corporate registry, if available, to the application and doesn’t request additional documents.

Please note that if the registry has a filing history and data can be pulled automatically, Sumsub only indicates the registry's name in the "Source" field without uploading screenshots.

Individuals who must pass an identity verification (KYC) procedure

If the level settings from the dashboard include UBOs, by default, all ultimate beneficial owners (natural persons owning, directly or indirectly, more than 25% of the company or otherwise exercising significant control over it) have to pass the identity verification (KYC) procedure.

The company’s senior managing official has to pass the identity verification (KYC) procedure in case there are no ultimate beneficial owners who own, directly or indirectly, more than 25% of the Company.

Sumsub accepts an extract from the UBO registry or another similar document disclosing all the UBOs of the company and doesn’t verify all the structure, if the flow settings include only the UBOs step.

If the level settings from the dashboard include representatives, by default, the "representatives" step is not required. However, if the application has the "representatives" step and the requirements weren't specified, Sumsub will identify any representative, such as a director/board member/CEO, etc, or a natural person so authorized by power of attorney.

If the level settings from the dashboard include directors, by default, the "directors" step is not required. However, if the application has the “directors" step and the requirements aren't specified, Sumsub will identify any natural person that holds a director’s position.

If the level settings from the dashboard include shareholders (not UBOs), by default, the "shareholders" step for individuals is not required. However, if the application has the "shareholders" step and the requirements weren't specified, Sumsub will identify all the shareholders owning, directly or indirectly, more than 25% of the Company.

If the parent/intermediate company undergoes the KYB procedure, the parent or intermediate company will be created with the level (company_zero) that includes 2 required documents that allows to establish an ownership structure and corporate details of the company. If you need a more complicated review of the parent or intermediate company, please set up the required level in the dashboard.

If the corporate structure includes nominee shareholders, they do not have to pass the identity verification (KYC) procedure.

Specific requirements regarding trusts

By default, Sumsub verifies the following natural and legal persons:

• if the settlor is an individual, the KYC procedure is required;
  
  
  • If the settlor is an entity, documents confirming the legal existence and ownership structure will be requested, and natural persons owning, directly or indirectly, more than 25% of the company or otherwise exercising significant control over it should undergo the KYC procedure.
• if the trustee(s) is an individual, the KYC procedure is required;
  
  
  • If the trustee(s) is an entity, documents confirming the legal existence and ownership structure will be requested, and natural persons owning, directly or indirectly, more than 25% of the company or otherwise exercising significant control over it should undergo the KYC procedure.
• if the protector is an individual, the KYC procedure is required;
  
  
  • If the protector is an entity, documents confirming the legal existence and ownership structure will be requested, and natural persons owning, directly or indirectly, more than 25% of the company or otherwise exercising significant control over it should undergo the KYC procedure.
• the beneficiaries, or where the individuals benefiting from the legal arrangement or entity have yet to be determined, the class of persons in whose main interest the legal arrangement or entity is set up or operates;
• any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means.

Sumsub can verify a beneficiary child under the age of 16-18. All other names of beneficiaries below the age of 16 will be recorded in notes without the KYC procedure.

Specific requirements regarding sole proprietorships

The documents we normally accept in order to verify it:

• recent excerpt from a state company registry;
• annual return;
• bank statement;
• certificate of registration / incorporation
• registration form / statement;
• annual return;
• business / trade license;
• tax form / certificate.

Correction of information

By default, Sumsub makes corrections where an applicant fills in an outdated company name or a minor (1-2 digits/letters) error in the company number (as demonstrated by a publicly available state registry or the attached documents). Likewise, the country field changes to the correct option according to the submitted documents. If the applicant does not fill in the registration number field or company name field, Sumsub makes fields according to the submitted documents by default.

If the EIN Number (for USA applicants) or any other secondary company-related numbers were indicated in the “Registration number” line, Sumsub indicates the primary registration number in accordance with the attached documents.

If the applicant does not fill the registration number field or company name field, or jurisdiction, Sumsub completes fields according to the submitted documents by default.

Sumsub removes such applicants from the corporate structure to speed up the verification. Also, we leave their applicant IDs in the notes.