This page describes how business verification process is conducted at Sumsub—the regulations we comply with, the KYB process' goals and significant components, and the types of business checks offered within the solution. In the article, we thoroughly collected all the information that you need to know about the Sumsub KYB service regarding legal entities verification, confirmation of the documents, and facilitating the steps they undertake during onboarding. Find the details structured in the following way:

• Checks that conducted during business verification
• KYB service description
• Types of business verification
• Legal entities' check
• Identification of ultimate beneficial owner
• Verification of corporate documents within Full KYB
• Confirmation of ownership and control structure
• Correction of information

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Legal disclaimer

This notice applies to all the recipients of this document; please note that we reserve the right to alter and update it.

This notice is provided on an "as-is" basis and for general informational purposes only; none of its contents shall be interpreted as creating an attorney-client relationship. Sumsub shall not under any circumstances be held liable for any damages incurred as a result of actions taken or not taken based on the information contained in this document.

This document is a result of the work of our professionals and constitutes the intellectual property of Sumsub. It may not be disclosed, whether as-is or in any way modified, to any third party without prior authorization by Sumsub. In the event of such a disclosure, Sumsub shall be entitled to equitable relief under applicable law.

Checks that we do

In accordance with the FATF Recommendation 10, legal entities must be identified in the following manner:

(a) Identifying the customer and verifying that customer’s identity 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. For legal persons and arrangements this should include financial institutions understanding the ownership and control structure of the customer.

Know Your Business (KYB) service

We provide identification and verification of legal entities as customers and assist in their KYB process for our clients. In order to identify and verify the entity, we usually collect the required information about the entity, such as business name, type of legal 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

• The 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].
• 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 24 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 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 entity, 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.

Corporate document verification within full KYB process

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.

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.

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.