How do you verify a company or other organisation?
What a firm must establish about a corporate customer, the documents that prove it, and how clubs, charities and similar bodies are checked.
By the ExamPass CY editorial teamLast reviewed 3 min read
Topic 5 of 14 · all topics in this chapter
- 1When CDD is required
- 2What CDD involves
- 3When CDD must be completed
- 4Verifying individuals
- 5Verifying companies and organisations
- 6Customer economic profile
- 7Beneficial ownership registers
- 8Simplified due diligence
- 9Enhanced due diligence and PEPs
- 10CDD by sector
- 11Ongoing monitoring
- 12Reliance on third parties
- 13Group-wide AML policies
- 14Prohibited practices and data use
Short answer
For a company, the firm identifies the entity itself, its directors, its beneficial owners and every person authorised to operate the account or act for it, and it takes the steps needed to understand who owns and controls the company. Verification relies on originals or certified copies of the certificates of incorporation, good standing, registered office and directors and secretary, plus the memorandum and articles. Where shareholders are nominees, the firm obtains the agreement that links them to the beneficial owner.
What the firm identifies and obtains
| Item | What the firm does |
|---|---|
| Company details | Records the registration number, registered and trading names, registered and head office addresses and contact details |
| People | Identifies the directors, authorised signatories and anyone acting for the company, and the beneficial owners of private companies and of public companies not listed on a regulated market in the EEA or a lower-risk third country |
| Corporate documents | Obtains originals or certified copies of the certificates of incorporation, good standing, registered office and directors and secretary, the memorandum and articles, and the board resolution opening the account |
| Shareholders | Obtains the certificate of registered shareholders for private companies and for public companies not listed on a regulated market in the EEA or a lower-risk third country |
| Nominee shareholders | Obtains the trust deed or agreement under which the nominee holds the shares for the beneficial owner |
| Where needed | Obtains the latest audited financial statements or management accounts |
| Companies incorporated abroad | Obtains equivalent documents from the country of incorporation |
Source: CySEC Directive for the Prevention and Suppression of Money Laundering and Terrorist Financing; Law 188(I)/2007, Articles 61 and 62(1).
What does understanding the ownership and control structure mean?
Identifying the company is not enough. The firm must take the necessary steps to see who ultimately owns and controls it, through every layer of holding companies and nominee arrangements, and then verify the natural persons at the end of that chain. Where a registered shareholder is only a nominee, the trust deed or agreement shows whose shares they really are.
For companies and trusts that must register their beneficial owners, the firm also collects proof of registration or an extract from the register. The register helps, but the firm may never rely on it alone; see Who can see beneficial ownership registers in Cyprus?
Terms used in this note
- Nominee shareholder
- A person or company registered as the owner of shares while holding them on behalf of someone else, the beneficial owner.
- Authorised signatory
- A person the customer has empowered to operate the account or give instructions on its behalf.
How are clubs, charities and similar bodies checked?
For clubs, charities, unions, societies and provident funds, the firm first establishes what the organisation does and confirms it is legitimate, using its constitution or rules and, where the law requires registration, its registration documents. It then obtains the list of board or committee members and verifies everyone authorised to operate the account in the same way as an individual customer. A verbal assurance or a public profile is never enough.
How to think about it
Identify the entity and everyone behind it or acting for it: the company, its directors, its beneficial owners and its signatories. Prove each layer with official documents, and follow every nominee shareholding to the person it really represents.
Common mistakes
Stopping at the company's own documents. The directors must be identified, and the identities of the authorised signatories, registered shareholders and beneficial owners must be verified.
Accepting nominee shareholders at face value. Obtain the agreement that shows whom they hold the shares for.
Treating a charity's reputation as verification. Legitimacy comes from its constitution and registration documents.
Relying on the beneficial ownership register alone. It supports CDD but never replaces the firm's own checks.
Legal references
- The Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 (Law 188(I)/2007), as amended (opens in a new tab)
Article 61(1)(b) (beneficial owner and ownership structure) · Articles 61A–61C (beneficial ownership registers) · Article 62(1) (proof of registration)
- CySEC Directive for the Prevention and Suppression of Money Laundering and Terrorist Financing, as amended (opens in a new tab)
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