Know your business (KYB) is the set of checks that confirm a business is real, and find out who owns and controls it. It is the business version of KYC. Banks run KYB before they open a current account for a company. Payment companies run it before they let a shop accept payments, and lenders run it before they give a business loan.
A business can be a front. A company can be registered, with a real address and a real bank account, and still exist only to move stolen money. Its directors may be paid stand-ins, while the real owner stays hidden. So KYB asks two questions. Is the business real and active? And who are the real people behind it?
In India, much of the answer comes from official records. The Ministry of Corporate Affairs (MCA) keeps each company's registration number, its directors and its filings. The GST portal shows whether the business's GST registration is active, and whether it files its returns. The Udyam portal records small businesses. A small test payment to the business's bank account, called a penny drop, confirms that the account exists and is in the business's name. KYB software calls each source and puts the results into one file.
The hardest part is finding the owners. The law asks for the beneficial owners: the real people who own or control a large share of the business, even through other companies. KYB software follows the chain of ownership, company by company, until it reaches people. Each of these people then goes through identity verification (IDV) and sanctions and PEP screening.
Take, for example, a payment company that receives an application from a new online store selling sarees, registered in Surat. The KYB software finds that the store's company was registered four months ago. Its GST registration is active, and its bank account passes the penny drop. But the company is 80% owned by a second company, registered at the same address as 40 other businesses. The software traces the second company to one person, who was also a director of six companies that closed recently. It flags the application. An analyst asks the store for more documents, and the store withdraws its application.
Some newer KYB products give the review to AI agents. One agent collects the records, another compares them, and a third writes a summary for the reviewer. A person still makes the final decision. What each agent may read and do is limited, as AI agent guardrails explains.
KYB is used before MSME loans and when sellers join a B2B marketplace. It is different from third-party risk management (TPRM). KYB asks whether a business is real and who owns it. TPRM asks whether a supplier's security is good enough.