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Media

KYC For Legal Entities

Matthew Warner | April 2020

From political parties to companies to cooperatives to municipalities, there are a variety of legal entities that exist, with statuses, rules and regulations that change depending on jurisdiction. These legal entities are created to allow a variety of legal functions to exist around groups which would otherwise have no legal method of representation. This is essential for enabling contracts to be drawn up, lawsuits to be carried out, regulations to be ascribed, and many other vital aspects of business and commerce to be carried out with these entities.

The necessity of KYC and identity management for legal entities is obvious. Without a means of verifying their identity and credentials, a legal entity would not be able to interact with others, negating the entire reason for their existence. Particularly in a digital world, legal entities need to be able to prove who they are and who is behind them in order for any contract or deal or other interaction to take place without the very real risk of fraud. People can hide behind the public face of the company to get around restrictions or obligations they would otherwise have to comply with. Collusion, misrepresentation, identity theft, breach of contract, fraudulent trading and a vast array of cybercrimes are all possible without methods of verifying identity. 

Any time a company is established or wishes to sign a contract or work officially with another company, there is a legal requirement for some form of KYC or identity verification to take place to ensure that business is being conducted in accordance with the regulations and guidelines set by the jurisdiction it is tied to. Documentation provision can involve a vast array of certificates or other official documents, such as Certificates of Incumbency, Memorandum and Articles of association, Bylaws, Certificates of Good Standing, Certificates of Registered address, Certificates of Directors and Secretary, Register of Directors, Power of Attorney, Financial Statements, Joint Venture Agreements and any manner of other evidence or paperwork required for specific cases. 

Traditionally, these methods of identification required meetings in-person to sign physical documents. This later evolved to incorporate digital contracts and documents to allow for a digital record. Today, there is a growing movement to remove the requirement for face-to-face meetings to prove identities or credentials, and to instead move to a model to allow for all types of interactions between legal entities to be carried out entirely online. However, in order for this to be enabled, a safe, secure, efficient and easy-to-use solution needs to be implemented to allow for those that are conducting business to be sure they are avoiding the dangers of fraud when working in the digital world. 

This is where Blockpass can help. In providing a fast, efficient, affordable and reusable KYC solution, Blockpass enables the possibility of setting up companies and conducting business in an entirely digital manner whilst retaining certainty in the identity of those involved and ensuring regulations are met to the highest standards. By adding reputations for entities, Blockpass can also provide greater levels of trust for those conducting business with them and highlight the most reliable. Whether it’s KYC for company incorporation, setup and registration services, KYC of founders and investors, the inception of Joint Ventures or any other business deals required by a company, Blockpass provides a simple avenue to prove and manage identity and documentation. These compliance solutions are designed to meet with the most stringent regulations whilst removing the pain points normally associated with KYC and identity verification, all whilst allowing remote verification, facilitating new ways of working and conducting business. On top of all this, all the information and data remains under the control of those who own it which, along with the nature of reusable KYC and certification, allows for a much faster, cheaper and generally more efficient way of working. 

Setup your KYC Connect service in minutes with pay-as-you-go, no setup fee and free testing – click here!

Useful Articles:
https://www.fraudadvisorypanel.org/wp-content/uploads/2015/04/Abuse-of-Incorporation-November-2012.pdf
https://www.met.police.uk/advice/advice-and-information/fa/fraud/business-fraud/corporate-identity-long-and-short-firm-insolvency-fraud/
https://www.gleif.org/en
https://economictimes.indiatimes.com/small-biz/legal/so-you-think-you-can-get-away-with-fraud/articleshow/54749482.cms?from=mdr
https://www.withersworldwide.com/en-gb/insight/piercing-the-corporate-veil-in-fraud-cases