Business Verification in Canada: Complete Guide [2025]

Parameter	KYB in Canada	KYB in the US
Regulatory Authority	FINTRAC (Financial Transactions and Reports Analysis Centre of Canada)	FinCEN (Financial Crimes Enforcement Network)
Primary Legislation	Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA)	Bank Secrecy Act (BSA), Corporate Transparency Act (CTA)
Process to conduct	Retrieve business registration from federal/provincial registries. Identify and verify beneficial owners (25%+ ownership). Use FINTRAC-approved identity verification (ID, credit check, dual-process). Confirm business operations if required (bank details, contracts). Maintain records for at least five years.	Register with the Secretary of State and obtain an EIN. Disclose beneficial ownership (25%+ under CTA). Verify identity using SSN, EIN, or third-party databases. Validate business activity (financial statements, public records). Keep records for at least five years.
Document Requirements	Certificate of Incorporation Business Number (BN) Shareholder Register (if applicable) Government-issued ID of owners Proof of business address Bank account details (if required)	Articles of Incorporation EIN Operating Agreement (if applicable) SSN/EIN for identity verification Business license (if applicable) Proof of operations (bank statements, contracts)
UBO Disclosure Requirements	Mandatory for entities with 25%+ ownership (FINTRAC requires disclosure of UBOs)	Mandatory disclosure of beneficial owners (25%+ ownership under CTA)
Accepted Verification Methods	Confirmation of existence, reliance on other reporting entities, simplified method for low-risk businesses	Public records, third-party data providers, business credit bureaus

Back in the days, a handshake used to seal deals. No paperwork, no background checks. Just trust. 

But business has changed.

Today, a company can exist on paper, online, or in name only. It can look legitimate, have clients, even process transactions—without ever being what it claims. That’s not a loophole. It’s just how modern business works.

So, how do you separate what’s real from what’s just well put together?

Canada has laid clear instructions for this. Take aside your 6 minutes to understand everything: what to check, how to confirm, and much more.

Let’s directly get into it.

What is Know Your Business Verification in the Context of Canada?

Know Your Business (KYB) verification in Canada refers to the process of identifying and validating a business entity before engaging in financial transactions or business relationships. 

It is mandated under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and enforced by FINTRAC (Financial Transactions and Reports Analysis Centre of Canada). 

The main idea behind conducting this KYB verification in Canada is to stop fraud, money laundering, and illegal financial moves.

Canada Business Verification Regulations

Canada’s business verification regulations, as outlined by FINTRAC, mandate that reporting entities adhere to specific protocols to prevent financial crimes. 

Here are five key points

1. Mandatory Identity Verification: Reporting entities must verify client identity for transactions: cash ($10K+), virtual currency ($10K+), electronic funds transfers ($1K+), and suspicious transactions (any amount). Applies to banks, securities dealers, casinos, and real estate.
2. Approved Verification Methods: Entities can verify identity using government-issued photo ID, credit file checks (must be Canadian, active for 3+ years), or dual-process verification (utility bill, tax document, or bank statement from separate sources).
3. Beneficial Ownership Disclosure: For businesses, entities must collect information on persons owning or controlling 25%+ shares and verify identity using reliable documents like shareholder registers, partnership agreements, or trust deeds.
4. Record-Keeping Obligations: Businesses must keep identity verification records for at least 5 years, including copies of IDs, transaction details, ownership records, and agent verification agreements for FINTRAC audits.
5. Use of Agents for Verification: Third-party agents can verify identities on behalf of reporting entities, but agreements must ensure compliance with FINTRAC rules, and businesses remain responsible for due diligence.

For more, you can refer to the official FINTRAC documentation.

Now, let’s see the document requirements.

Documents Required: What Information to Collect and Verify?

Category	Acceptable Documents	Notes
Basic Business Information	– Legal Business Name – Operating Name (if different) – Business Registration Number (BN) – Type of Entity – Business Address – Industry and Nature of Business	Mandatory for all businesses before verification. This is the first step.
Proof of Business Registration	– Certificate of Incorporation (for corporations) – Partnership Agreement (for partnerships) – Provincial or Federal Business Registration Document – Trade Name Registration (if applicable)	Mandatory depending on business type (corporations and partnerships must provide legal registration).
Beneficial Ownership Information	– List of Individuals Owning 25% or More of the Business – Names, Dates of Birth, and Addresses of Beneficial Owners – Ownership Percentage and Control Structure – Proof of Ownership (e.g., Shareholder Register, Articles of Incorporation, Partnership Deeds)	Mandatory if the entity has multiple owners or shareholders.
Identity Verification of Owners & Authorized Signatories	– Government-issued photo ID (Driver’s License, Passport, PR Card, etc.) – Canadian Credit File Check (Active for 3+ years, if available) – Dual-Process Method (e.g., Utility Bill + Bank Statement or CRA Tax Document)	Mandatory for individuals with significant control over the business.
Business Financial Information (If Required for Risk Assessment)	– Bank Account Details (Confirming the Business’s Financial Activities) – Tax Identification Number (GST/HST Registration, if applicable) – Financial Statements (For due diligence in high-risk cases) – Proof of Business Operations (Invoices, Contracts, or Website Presence)	Required in high-risk industries, financial institutions, or if flagged for additional review.

Methods to verify businesses in Canada

Verifying a business in Canada ensures legitimacy, regulatory compliance, and fraud prevention. 

FINTRAC mandates verification based on the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). 

Depending on the business type and risk level, different methods apply. Let’s go through each.

1. Confirmation of Existence Method

The confirmation of existence method is the most straightforward way to verify a business. It requires obtaining official documents that prove the business is legally registered and recognized by a government authority. These documents can include: 

• Certificate of incorporation for corporations
• Partnership agreement for partnerships
• A business license issued by a provincial or federal registry. 

In many cases, verification is done by cross-referencing the provided documents with publicly available business registries or databases, ensuring the business is active and operating as claimed. 

This method is mandatory for most financial and high-risk transactions.

2. Reliance Method

In some cases, a business does not need to be verified from scratch if another trusted reporting entity has already conducted a FINTRAC-compliant verification. This is known as the Reliance Method, which allows one entity to depend on the due diligence work of another. 

For this method to be valid, there must be a written agreement in place that outlines the reliance arrangement and confirms that the initial verification was conducted using approved methods. The entity relying on this verification must still assess the credibility of the original verifier and maintain oversight to ensure compliance with FINTRAC’s regulatory requirements.

3. Simplified Identification Method

Certain businesses are classified as low-risk under FINTRAC’s framework and may be eligible for simplified verification. These typically include government agencies, publicly traded companies listed on recognized stock exchanges, and regulated financial institutions such as banks and securities dealers. 

Instead of collecting extensive documentation, verification can be conducted using publicly available information, such as stock exchange listings, government records, or regulatory filings. 

This method significantly reduces the administrative burden but is only applicable to entities explicitly listed under FINTRAC’s simplified verification rules.

4. Agent or Mandatary Verification Method

Businesses can also be verified through an agent or mandatary who conducts the verification process on behalf of a reporting entity. The agent must follow FINTRAC’s prescribed verification methods, maintain detailed records, and ensure compliance with all regulatory requirements. 

This is often used in cases where businesses operate in different jurisdictions or when third-party professionals, such as lawyers or financial institutions, are better positioned to collect and authenticate the necessary information. 

But note that, even when using an agent, the original reporting entity remains fully responsible for ensuring that the verification meets the required standards, conducting enhanced due diligence when required, and that records are retained for at least five years.

Conducting Business Verifications in Canada at Scale

Some businesses look right on paper but don’t add up in reality. They’re registered, have tax IDs, and check all the basic boxes.

But that doesn’t mean they’re active, legitimate, or low risk. 

Ownership structures can be layered, operations may not match filings, and some entities exist only to move money unnoticed. 

Without a way to verify these details at scale, financial institutions are left piecing together fragmented information, slowing down approvals and exposing themselves to compliance gaps.

That’s where automation changes the game. Instead of relying on manual cross-checks and document collection, you can use Signzy’s UBO Verification APIs to map out ownership structures, identify the real individuals in control, and more, even when businesses are structured to hide them. 

Combined with Signzy’s comprehensive business verification suite, financial institutions can onboard businesses faster, with fewer blind spots and stronger compliance.

Signzy is now available in Canada.