US KYB Due Diligence: The Complete Checklist for Compliance Teams
How to conduct Know Your Business (KYB) verification for US companies — CIK lookup, state of incorporation, UBO identification under the Corporate Transparency Act, sanctions screening, and adverse media checks.
What is KYB for US Companies?
Know Your Business (KYB) is the process of verifying the identity, ownership, and legitimacy of a business entity before entering a commercial relationship. For US counterparties, KYB has become significantly more complex since the Corporate Transparency Act (CTA) came into effect in January 2024 — requiring most US companies to file Beneficial Ownership Information (BOI) with FinCEN.
US KYB is also governed by FinCEN's Customer Due Diligence (CDD) Rule for financial institutions, OFAC sanctions requirements, and state-level licensing requirements for regulated industries. Failure to conduct adequate KYB can result in regulatory enforcement, reputational damage, and liability for facilitating financial crime.
Step 1: Entity Identification and Verification
Verify legal name and registration: Confirm the exact legal name (e.g., "Apple Inc." not "Apple") against the state of formation registry. In Delaware, use the Division of Corporations search at icis.corp.delaware.gov. In California, use bizfileSF.sos.ca.gov.
Obtain CIK number (if SEC-registered): For publicly listed companies, the SEC EDGAR CIK is the most reliable unique identifier. Use Synta-IQ or EDGAR's company search to confirm the CIK and verify that the company is actively reporting.
Check EIN (Employer Identification Number): For private companies, the EIN (Tax ID) is the primary US federal identifier. EINs are not publicly searchable — the counterparty must provide it.
Confirm good standing: Verify the entity is in good standing with its state of formation. Most Secretary of State offices offer online good standing certificates. A company not in good standing may have unfiled annual reports, unpaid taxes, or pending dissolution.
Step 2: Beneficial Ownership Under the Corporate Transparency Act
The Corporate Transparency Act (effective January 1, 2024) requires most US legal entities to file BOI (Beneficial Ownership Information) reports with FinCEN, identifying individuals who:
- Own 25%+ of the company's equity interests, OR
- Exercise "substantial control" over the company (CEO, CFO, COO, general counsel, or equivalent)
Who is exempt? Large companies (500+ employees, $5M+ revenue, US physical presence), SEC-reporting companies, banks, credit unions, insurance companies, and 23 other categories. Most Fortune 500 companies are exempt.
How to use BOI for KYB: Financial institutions and regulated businesses can request BOI from counterparties as part of KYB. The FinCEN BOI database is not publicly accessible (limited to law enforcement and authorized financial institutions with BSA/AML obligations).
Practice: Request a certified copy of the BOI filing or a signed UBO declaration from the counterparty. Cross-reference against other data points — 10-K beneficial ownership tables for public companies, 13D/13G filings, and proxy statement ownership disclosures.
Step 3: Sanctions and Adverse Screening
OFAC SDN List: Check all identified individuals and entities against the OFAC Specially Designated Nationals list. OFAC sanctions apply to all US persons and entities — there is no de minimis threshold. Use ofac.treasury.gov/sanctions-list-service for batch screening.
FinCEN 314(a) / Patriot Act: Financial institutions have enhanced KYB obligations for correspondent banking and foreign financial institutions under Section 312.
State-level licensing: Many US industries require state-level licenses — financial services, insurance, real estate, healthcare, cannabis, securities dealers. Verify that the counterparty holds current licenses in every state where they operate. Non-licensed activity is a compliance red flag.
Adverse media: Search for litigation, regulatory enforcement actions, SEC enforcement (use SEC EDGAR's enforcement search), CFPB orders, state AG actions, and criminal proceedings. Federal court records are searchable via PACER (pacer.gov).
Step 4: Financial Health Assessment (for Credit/Commercial KYB)
For credit, trade finance, or high-value commercial relationships, extend KYB to include financial assessment:
Public companies: Pull the most recent 10-K and 10-Q from SEC EDGAR. Review:
- Revenue trend (3-5 year CAGR)
- EBITDA margin and trend
- Net debt / EBITDA ratio
- Free cash flow generation
- Going concern disclosures (if any in the auditor's report)
- Credit rating (Moody's, S&P, Fitch if rated)
Private companies: Options are more limited. Request audited financials. Check for FinCEN SAR (Suspicious Activity Report) indicators through your BSA/AML program. Dun & Bradstreet (D-U-N-S number) and Experian Business Credit are commercial sources for private company credit data.
US KYB Checklist Summary
✓ Legal name verified against state of formation registry
✓ Good standing certificate obtained
✓ CIK number confirmed (SEC-registered companies)
✓ Beneficial owners identified (25%+ equity or substantial control)
✓ BOI filing confirmed or UBO declaration obtained
✓ All individuals and entities screened against OFAC SDN list
✓ State-level licenses verified for regulated activities
✓ Federal court records checked via PACER
✓ SEC enforcement actions reviewed (for financial services)
✓ Financial statements reviewed (10-K/10-Q for public; audited accounts for private)
✓ Adverse media search completed
✓ Ongoing monitoring program established
Search US companies on Synta-IQ
Access SEC EDGAR data for 10,000+ US public companies — 10-K filings, XBRL financials, insider ownership, and more.
Search US companies on Synta-IQ →Related Resources