KYC Verification for Business Customers in India | OmnaData

Written by the OmnaData Risk Intelligence Team. Regulatory references verified against the RBI KYC Directions as amended. Updated July 2026.

Quick answer: When you onboard an individual, KYC is one job. When your customer is a company, it is three: verify the entity itself, verify the individuals authorised to act for it, and identify and verify its beneficial owners. Most identity-verification vendors solve only the second. The threshold for who counts as a beneficial owner in India is now 10%, not the 25% many onboarding processes were built around — which means a lot of UBO registers are quietly incomplete.

One Phrase, Two Completely Different Jobs

“KYC verification company” is one of those searches that lands people in the wrong place. It can mean a company that performs KYC — an identity-verification vendor doing Aadhaar, PAN and video KYC on individuals. Or it can mean performing KYC on a company, which is a different exercise entirely and is properly called KYB, Know Your Business.

The distinction matters because the two are sold by different providers and solve different problems. If you are onboarding retail customers, you need the first. If your customers are businesses, you need both — and the part most onboarding stacks handle worst is the entity side.

Three Layers, Not One

Under the RBI's KYC framework, onboarding a legal-entity customer means satisfying yourself about three distinct things. Customer due diligence explicitly extends to understanding the nature of the customer's business and its ownership and control structure — not merely confirming that a person holding a document exists.

Layer	What must be verified	Where the data lives	Who typically provides it
1. The entity	That the company is real, registered, active and is what it claims to be — including its GST registration	MCA records, GST portal, PAN, Udyam for proprietorships	Entity intelligence providers (KYB)
2. The people acting	That the individuals signing and operating the account are who they say they are, and are authorised	Aadhaar, PAN, video KYC, board resolutions	Identity verification vendors (KYC)
3. Beneficial owners	Who ultimately owns or controls the entity, at the 10% threshold, and their identity	Shareholding records, ownership structure, declarations	Entity intelligence + identity verification together

The third layer is where onboarding programmes most often fall short, because it needs both kinds of data. You cannot identify a beneficial owner without accurate ownership information about the entity, and you cannot verify one without identity capability. Buying only an identity vendor leaves layer one and half of layer three unsolved.

The 10% Change Most Registers Haven't Caught Up With

This is the single most consequential detail for anyone maintaining a UBO register in India. Aligning with amendments to the PMLA Maintenance of Records Rules, the threshold for determining beneficial ownership was lowered to 10% — down from 25% for companies and 15% for partnership firms and trusts.

What that means in practice. A shareholder holding 12% of a corporate customer was previously outside the beneficial ownership definition and is now inside it. Any UBO register built against the old thresholds is not merely out of date — it is missing people it is now required to identify. If your onboarding logic still filters shareholders at 25%, that is a gap worth auditing before someone else finds it.

The practical consequence is a data problem more than a process problem. Identifying beneficial owners at 10% requires shareholding information accurate enough to see down to that level, including through intermediate holding entities. Self-declaration by the customer is the starting point, not the verification.

What Else Has Tightened

Several other changes are worth knowing if your onboarding pack was written a few years ago.

GST verification at onboarding. Where an entity holds a GST registration, verifying the GSTIN and cross-checking it against the other documents submitted is now expected rather than optional. A live GSTIN whose legal name matches the entity is a strong corroborating signal; a mismatch is a finding.
Udyam as business proof. The Udyam registration certificate is recognised as valid business proof for sole proprietary firms — genuinely helpful, because proprietorships have no incorporation document to produce.
Ownership and control in scope. Customer due diligence covers understanding the customer’s business, ownership and control structure, and establishing whether the customer is acting on behalf of a beneficial owner.
Periodic updation. Re-KYC operates on a risk-based cycle, with revised timelines introduced during 2025 for lower-risk customers. Onboarding is the start of the obligation, not the end of it.

Because these are statutory obligations with supervisory consequences, treat the summary above as orientation and work from the current Master Direction text and your own compliance advice for the detail.

Where the Entity Data Actually Comes From

For layer one and the ownership half of layer three, the underlying sources in India are the ones the rest of this cluster deals with: MCA filings for companies and LLPs, GST records, PAN, and Udyam for proprietorships. Partnership firms and proprietorships complicate matters, because they file nothing with the MCA and have to be verified through a different combination of signals entirely.

That is the layer OmnaData covers. Our reports establish the entity picture — registration and status, financial position, ownership and related-party structure, litigation and adverse media, and a comparable risk rating — including for proprietorships and partnership firms that defeat many providers. For beneficial ownership specifically, the ownership and related-party mapping is the input that makes a 10% analysis possible rather than notional.

To be clear about what we don’t do. OmnaData does not perform individual identity verification — no Aadhaar authentication, no video KYC, no liveness checks. That is layer two, and it needs a dedicated identity-verification provider. A complete business-onboarding stack in India generally pairs the two: an identity vendor for the people, entity intelligence for the company and its ownership.

Frequently Asked Questions

What is the difference between KYC and KYB?

KYC verifies an individual — identity documents, Aadhaar or PAN, video verification. KYB verifies a business entity — registration, status, GST, ownership and control structure. When your customer is a company you need both, plus identification of its beneficial owners.

What is the beneficial ownership threshold in India?

It is 10%. The threshold was lowered from 25% for companies and 15% for partnership firms and trusts, aligning with amendments to the PMLA Maintenance of Records Rules. Onboarding processes and UBO registers built against the older thresholds will be missing individuals who now qualify.

What documents are needed for KYC of a company in India?

Typically the entity's registration proof and PAN, GST registration where held, proof of the registered address, board or partnership authorisation for those acting on its behalf, identity documents for authorised signatories, and a declaration plus supporting evidence identifying beneficial owners. For sole proprietary firms, the Udyam registration certificate is recognised as valid business proof.

Is verifying the director the same as verifying the company?

No. Verifying a director confirms an individual's identity. It does not confirm that the entity is real, active and correctly represented, and it does not establish who ultimately owns or controls it. Those are separate layers requiring different data.

How do you do KYB for a proprietorship or partnership firm?

They cannot be verified through MCA records because they do not file there. Verification relies on PAN, GST registration, Udyam registration — now accepted as business proof for sole proprietary firms — and, for partnerships, the deed and any Registrar of Firms certificate, cross-checked for consistency.

Key Takeaways

When the customer is a company, KYC is three layers: the entity, the people acting for it, and its beneficial owners.
Identity-verification vendors typically solve only the middle layer; entity and ownership data come from elsewhere.
The beneficial ownership threshold is 10%, not 25% — registers built on the old number are incomplete by definition.
GST verification at onboarding is now expected, and Udyam is accepted as business proof for proprietorships.

If the gap in your onboarding is the entity and ownership side rather than identity, see what an OmnaData report establishes — registration, financials, ownership and related-party structure, litigation and a risk score — or talk to our risk intelligence team about your onboarding requirements.

This article is for general informational purposes and does not constitute legal or compliance advice. KYC obligations are set out in the RBI Master Direction as amended and in the PMLA rules, both of which change periodically and apply differently by entity type and risk category. Regulated entities should work from the current directions and their own compliance counsel.