Business verifications

Business verification is typically the first step that you’ll take in the KYB process. Business verification helps determine if a business is legitimate by searching against authoritative data sources like a business registry.

In this video, we’ll walk through the business verification process, highlighting different Persona products that can help.

For demonstration purposes, we’re using the default KYB solution. This includes two of the verifications we’ll discuss within this video:

1. Taxpayer identification number verification, also referred to as TIN verification
2. And Business Registry Verification, also referred to as the BRV

With Persona, you can choose the verifications you’ll use in this initial KYB step based on the type of business you’re trying to verify. So what constitutes a legitimate business? There’s no single answer; this can be defined in many ways.

Consider the process of incorporation, and all that goes into it. That process in the United States might include:

• Generating a unique business name and selecting a business address
• Filing articles of incorporation in your state
• Obtaining an employer identification number via the Internal Revenue Service
• Setting up a corporate bank account for taxation purposes
• Securing additional licenses like a sales tax ID
• And more!

The picture becomes even more complex when you factor in different business structures and other requirements based on geographic location.

A best practice when determining a business’s legitimacy is searching for it in an official business registry. Examples include the IRS in the United States and Companies House in the UK.

A business will typically be listed in the official registry of the country where they’re incorporated. Note that some countries like Mexico do not require all operating businesses to be listed in the country’s official registry.

All of Persona’s business verifications follow a basic structure:

• Step one — Persona receives input data — either collected directly from the business in question or sent to us from your system
• Step two — Persona searches for that data using authoritative data sources
• Step three — Persona returns the results of that search

The typical output from any Persona verification will be a pass or fail, paired with specific verification check details for more granular results. For example, when verifying a business’s registration details, we’ll return information on whether the business is active.

Now let’s discuss specific types of business verifications that Persona offers. For US businesses, TIN verification is one of the most important business verifications. This verification checks that a company’s name and tax number match a record in the IRS’s database. A match indicates the business is formally registered with the IRS to pay taxes.

Based on the business’s business structure, it may have a different type of TIN compared to other businesses. For example:

• Limited Liability Companies, also known as LLCs, will have an employer identification number or EIN for short
• However, Sole proprietors have more flexibility; they may use their social security number as their TIN, or create an EIN if desired

One common challenge of verifying data with the IRS is that their system periodically experiences downtime. To combat this, Persona’s KYB solution helps incorporate built-in retry logic. In the event of IRS downtime, Persona can fall back to other verification methods such as document verification, or re-attempt the TIN Verification once IRS systems are restored.

Next, we’ll discuss Persona’s Business Registry Verification, also known as the BRV. The BRV searches in Secretary of State filings to find a matching record using the provided business details.

This is especially important because these filings can help determine if a business is in good standing. The definition of good standing varies across jurisdictions. Some reasons why an entity loses “good standing” status include failing to pay state taxes on time or failing to file documentation required by the governing body.

The Business Registry Verification is also used to verify businesses internationally in 100+ countries. Similar to how it works for US businesses, the BRV searches against a given country’s business registry(s).

Regardless of where you use the BRV, you’ll rely on our Contextual Matching engine. With it, you can define how you search and match against a given country’s business registry.

The BRV comes with pre-configured matching recommendations for each country. If needed, you can finetune settings using Persona’s Verification Template Editor.

Let’s review an example of results from the BRV in the Persona dashboard.

In this instance, we ran the BRV on a Canadian business using the recommended inputs — business name, address, and registration number.

The verification passed because Persona found a match against:

• The business name
• The registration number
• And the city and subdivision

In the Verification Template, we’ve configured the settings so that only a matching business name and registration number are required to pass the check. Based on your team's needs and risk tolerance, you can customize these settings in the Verification Template editor.

The last business verification we’ll discuss is Persona’s VAT verification. VAT refers to Value Added Tax, a tax scheme relevant in the European Union. Our verification confirms that the VAT number and country code provided match records found within official databases

Not every business will have a VAT number. It ultimately represents a business's ability to participate in this tax scheme. Depending on the country, a business’s VAT number may differ from its business registration number.

Here’s an example of VAT verification results in the Persona dashboard. Persona’s VAT verification searches for the provided VAT number in the EU’s official VAT registry, and returns a status of pass or fail.

These verifications provide a starting point for any KYB solution, as they help establish the existence of a business. In most situations, you’ll also want to know additional information about the business before making a decision. We refer to that process as data enrichment, which we’ll cover in a subsequent video.

To recap, in this video, we covered several ways that Persona helps verify the existence of a business. Check out the additional KYB documentation below this video if you’d like to learn more. Thanks for watching this lesson!

Helpful articles:

• Business Registry Verification
• Understanding match groups
• TIN Verification
• VAT Verification