Key takeaways
- KYC stands for “know your customer”. Banks need to carry out these checks by law.
- Banks check the company as a legal entity and the people who own or control it.
- Requirements vary between banks and depend on how your business is structured.
- Getting your company and ownership details in order before you apply saves time.
What are KYC documents for a business bank account?
KYC means “know your customer”. It’s how a bank confirms who you are before it opens an account. Banks are required by law to do this.
KYC sits within two wider sets of checks. Customer due diligence is about understanding who a bank is dealing with. Anti-money laundering checks are about preventing financial crime. You don’t need to know the legal details, but it helps to know why you’re being asked.
KYC applies to your company as a legal entity and to the individuals who own or control it, not just the person opening the account.
For the full picture, see our guide to the documents required for a business bank account.
What KYC documents can banks ask businesses to provide?
KYC covers the company itself. Common company documents include:
- Proof of incorporation
- Your registered address
- Your trading address
Requirements vary between banks and depend on the nature and structure of your business. If you’re not sure what a bank will ask for, check before you apply. Our guide on how to open a business bank account explains the full process.
Documents used to verify directors and other key individuals
Banks also verify the identity and address of directors and other people connected to the account.
They’ll usually accept a range of evidence, but not every bank asks for the same things. If you have several directors or authorised signatories, expect that each person who needs checking will need to provide their own documents.
You’ll most likely be managing this on behalf of your company. Think of it as a business task and plan ahead, rather than something a consumer does in a lunch break.
Documents used to verify beneficial ownership
A beneficial owner is a person who ultimately owns or controls the business. Banks call them the ultimate beneficial owner, or UBO.
Banks need to identify anyone with a significant ownership or control stake. It stops people hiding behind company structures.
It gets more complex if you have several shareholders, layered holding companies or owners based overseas. The more layers, the more paperwork.
Why might a bank ask about source of funds?
Source of funds is about where the money originally came from and how it was made. A bank might ask for things like:
- Your trading history
- Retained profits
- Money the founders put in
- Proceeds from a refinancing or a sale
It’s standard, and a clear answer usually settles it quickly.
Why can KYC requirements be more detailed for established businesses?
Established businesses often have more going on. More complex ownership, several directors, group structures or large transactions can all mean more verification.
That doesn’t mean there’s a problem; it just means there’s more to check. If you’re an established small or medium-sized business, it’s worth being ready for it.
How can businesses prepare for KYC checks?
A little preparation saves a lot of time. Here’s how to get ready:
- Keep your company, ownership and director information accurate and easy to find.
- Check that Companies House shows your current structure, directors and people with significant control.
- Gather supporting information early, particularly if you’re opening or changing your banking.
- Reply quickly to any requests. Delays often come from missing documents, not from the checks themselves.
KYC checks come up when you change banks, too. If you’re thinking about moving, read our guide on switching business bank accounts.
Opening a business bank account with Allica Bank
Having accurate company and ownership details ready helps you get through our application quickly. It’s one of the simplest ways to avoid delays.
You’ll also get a dedicated relationship manager, who can talk you through what we need and why. For many established businesses, that personal support makes the process far less daunting.
Find out more about the Allica Business Rewards Account, or see how you can switch to Allica.
Links were live and information was correct at the time of writing the article.
Disclaimer: This is information – not financial advice or recommendation.
The content and materials featured in this article are for information and education only, and are not intended to take into consideration any particular recipient’s financial situation. The product details referred to are correct at the time of writing. The information does not constitute financial advice or recommendation and should not be considered as such.
