Business Document Verification: Everything You Need to Know

If your organization regularly works with other businesses, whether they’re customers, partners, or contractors, it’s important to verify that they’re actually who they claim to be. Failing to do so can leave you vulnerable to fraud, including fraudulent misrepresentation and business impersonation. And if you’re subject to Know Your Business (KYB) regulations, it could also put you at risk of non-compliance.

So how can you be sure that a business truly exists and that you are allowed to do business with it? That’s where business document verification comes into play.

Below, we take a closer look at what business document verification is, what it entails, and how it fits into your broader KYB process. We also discuss some common types of business documents you may consider collecting and verifying, as well as the characteristics you should look for in a verification solution.

What is business document verification?

Document verification is the process of determining whether a document provided as proof of identity is valid and authentic. This can include documents like mail (for proof of address), bank statements (for proof of funds), employment records (for proof of employment), etc. For many businesses, like financial institutions, it’s an integral step in the identity verification process that new customers must go through.

Business document verification is simply the same process extended to business documents. Because businesses don’t have government-issued IDs, business document verification often forms a central piece of the Know Your Business process.

The specific steps involved in verifying business documents can vary. That said, it often looks like this:

The business representative is prompted to submit images or PDFs of certain business documents. While these documents may differ depending on the jurisdiction the business operates within or its organizational structure (sole proprietorship, LLC, corporation, etc.), it often includes a mix of ownership documents, tax documents, and other corporate documents.
The documents are analyzed to ensure their authenticity and validity — and to detect any signs of tampering or forgery. This can be achieved via manual evaluation or automated verifications that rely on algorithms and machine learning to verify the document.
Optionally, the information contained within the documents is cross-checked against information provided by the business representative and/or verified against authoritative sources such as government databases.

How does business document verification fit into KYB?

The KYB process typically has three main goals:

Determine whether the business you’re working with is real
Determine whether the people who own and run the business — its ultimate beneficial owners (UBOs) — actually exist
Evaluate both the business and its UBOs for different types of risk to determine if you should be engaging with them

Business document verification supports these goals by enabling you to collect information about a business before working with them — information you can use to confirm their legitimacy and assess risk before deciding whether to proceed.

However, it's important to remember that document verification is typically just one component of a comprehensive KYB strategy. To get the most value from it, it’s best used in combination with other verification methods.

By pairing it with database verification, for example, you can compare the information in a document against data from an authoritative source. This can help you detect potentially forged or altered documents. Likewise, by pairing it with link analysis, you can compare the information in the documents against other business data in your system, helping you uncover potential fraud rings and keeping your platform safe.

Types of business documents

While it isn’t an exact science, business documents can generally be grouped into three categories: ownership documents, tax documents, and other corporate documents.

Depending on your risk tolerance and assurance needs, you may be comfortable collecting and verifying a single document from a single category; alternatively, you may decide that you need multiple documents from multiple categories. After all, the more business documents you collect, the more data you have to work with as you construct a risk profile for each business.

Ownership documents

Ownership documents detail the ownership structure of a business entity. In addition to information about the business itself, ownership documents typically contain information about the business’s ultimate beneficial owners (UBOs). Common examples include:

Ownership agreements
Partnership agreements
Trust agreements
Membership agreements
Shareholder agreements
Stock certificates and ledgers

Tax documents

Organizations’ tax documents can be a wealth of information about both the business and its owners, containing everything from names and addresses to information about its corporate structure, taxpayer identification numbers like Social Security numbers, Employer Identification numbers (EINs), VAT numbers, Foreign Tax Identifying numbers (FTIN), and more. Common examples include:

Form W-8 ECI
Form W-8-BEN-E
Form W-9
IRS 147C Letter
IRS CP565 Letter
IRS CP575 Letter

In some cases, tax documents can also offer a more current or accurate view than official registries — particularly when a government database hasn’t yet been updated.

What to look for in a business document verification solution

If you’re in the market for a business document verification solution, it's important to ensure it not only meets your current needs but can also scale with you as your business grows and evolves.

With that said, some characteristics you may want to look for in a solution include:

Collection and verification capabilities

Not all document verification solutions are actually able to verify that a document is valid and authentic. Some only facilitate document collection, leaving the actual verification to someone on your team.

While manual review might be feasible at low volumes, it quickly becomes unsustainable as your business grows. Whenever possible, opt for a solution that can both collect and automatically verify documents — minimizing manual work for your team.

Ability to support multiple document types

The reason you collect and verify business documents as a part of your KYB process is so you can feel confident as you determine whether you should be engaging with a particular business.

The number and type of documents you need can vary based on factors like the level of assurance required, the nature of the businesses you work with, the jurisdictions you operate in, and applicable regulations. In some cases, a single document may suffice; in others, you may need several. However, not all solutions are equally equipped to verify a wide variety of documents. Many specialize by business type, jurisdiction, or other criteria.

Choosing a solution that can handle a broad range of business documents reduces the risk that you'll need to add another tool to your regtech stack down the line if your verification needs expand.

Experience in global KYB

Business documents can vary significantly from country to country. What’s standard in one jurisdiction might not exist in another — or it may appear in an entirely different format than you’re accustomed to.

That’s why it’s important to choose a document verification solution that can adapt to the norms of each jurisdiction where you operate. Ideally, opt for a provider with a proven track record of handling documents across multiple regions.

Defenses against generative AI

As fraudsters increasingly leverage generative AI tools, forging or altering documents to bypass KYB checks has become easier than ever. That’s why any solution you choose must include robust, built-in defenses against these evolving threats.

What these defenses look like will vary by provider, but here are some key capabilities to look for:

Passive signal collection: Detects when tools like virtual cameras or emulators are used to inject AI-generated images instead of capturing them directly from a device’s camera.
Document liveness detection: Analyzes documents for signs of tampering — such as visual artifacts — that may suggest forgery or digital manipulation.
Issuing database verification: Allows you to cross-reference the information in a document with authoritative sources to identify inconsistencies or red flags.

An important part of your KYB process

Business document verification is a foundational element of most organizations’ KYB processes. The right solution doesn’t just help you meet today’s compliance and risk requirements — it also scales with you as your business grows and evolves.

Here at Persona, we understand how critical it is to get KYB right. That’s why we’ve built a flexible platform that enables you to tailor your KYB program to your specific needs. At its core is a powerful document verification system designed to both collect and verify a wide range of business documents from jurisdictions around the world.

On top of that, you can layer additional verification methods to achieve the assurance your business requires, including:

UBO verification via government ID verification and selfie matching
Database checks against authoritative sources such as Secretary of State (SOS) filings, VAT number validators, international business registries, and more
Risk reports including sanctions and watchlist screenings, PEP checks, and adverse media coverage to help you gain a better sense of the risk profile of a particular business
Online credibility checks that pull data like industry classification and digital presence to evaluate a business’s legitimacy online

Ready to learn more about how Persona can help you verify business documents and get KYB right? See how Twilio uses Persona for KYB, or reach out to a member of our team today.

Business document verification: What it is, why it’s important, and how it fits into your broader KYB strategy