> ## Documentation Index
> Fetch the complete documentation index at: https://docs.straddle.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Business identity verification (KYB)

> Verify business entities with Straddle's KYB checks, including beneficial owner identification, EIN validation, and ongoing risk monitoring for ACH payments.

Straddle provides an Identity Verification module specific for Business Customers, operating in similar ways to our Identity Verification module for Individuals. This guide will walk you through the process of onboarding business customers using Straddle's API.

# Onboarding Business Customers Using Straddle

To onboard a business customer using Straddle's API, you'll need to follow these steps:

1. **Collect Business Information**: Gather the necessary information about the business, including: EIN, Legal Business Name, Business Address, and people associated with the business.
2. **Submit Business Information**: Use Straddle's API to submit the business information using the `POST /v1/customers` endpoint.
3. **Verify Business Identity**: Straddle's Identity Verification module will process the submitted information and generate a result for the business identity verification.

The process is similar to the individual identity verification process, but with additional fields for business-specific information.

<Note>
  Business identity verification will only be triggered if the `Compliance Profile` (`EIN` and `Legal Business Name`)
  and `Address` are provided. It will be skipped if not, and the customer will be moved directly to `verified` status.
</Note>

# Business Identity Reason Codes

When using Straddle's API for business verification, our system performs comprehensive checks on the business information you provide. These checks generate Business Identity (B) codes that offer insights into the verification results and help you make informed decisions about your business customers.

## Overview

Business Identity codes are alphanumeric identifiers that start with the prefix "BI" and provide specific information about the business verification process. These codes help you understand:

* Whether the submitted business information matches official records
* The validity of the provided tax ID
* Potential discrepancies in business names or addresses

<Note>
  Business verification is crucial for regulatory compliance and fraud prevention. Always review these codes carefully
  to understand verification outcomes.
</Note>

## Interpreting Business Identity Codes

Business Identity codes typically fall into several categories, each providing information about different aspects of the business verification process:

### Business Name & Tax ID Verification

These codes indicate whether the provided business name and tax ID match official records:

| Code      | Description                                                                                   |
| --------- | --------------------------------------------------------------------------------------------- |
| **BI102** | The provided tax ID is associated with the submitted business                                 |
| **BR103** | The provided tax ID does not appear to be associated with the submitted business              |
| **BI301** | The submitted business name aligns with official records                                      |
| **BI302** | Minor typographical discrepancies have been detected in the submitted business name           |
| **BR104** | The provided tax ID is linked to the individual named in the submission                       |
| **BR105** | No confirmation is available that the provided tax ID belongs to the submitted business       |
| **BR304** | Notable discrepancies are present in the submitted business name compared to official records |
| **BR305** | The submitted name appears to represent an individual rather than a business entity           |

### Address Verification

These codes help verify the submitted business addresses:

| Code      | Description                                                                           |
| --------- | ------------------------------------------------------------------------------------- |
| **BI107** | The provided address is associated with the submitted business                        |
| **BI108** | The provided address is situated near the address on record                           |
| **BI109** | The provided address includes slight errors but closely matches the address on record |
| **BR111** | The submitted address does not appear to be associated with the business              |
| **BR112** | Verification of the submitted address could not be established                        |

### People Affiliation

These codes provide information about the relationship between the submitted individuals and the business:

| Code      | Description                                                                             |
| --------- | --------------------------------------------------------------------------------------- |
| **BI601** | All named individuals appear to be affiliated with the submitted business               |
| **BI602** | At least one of the named individuals is affiliated with the submitted business         |
| **BI603** | Certain individuals not listed may also be affiliated with the submitted business       |
| **BR604** | None of the named individuals appear to be affiliated with the submitted business       |
| **BR605** | Affiliation of the named individuals with the submitted business could not be confirmed |

### OFAC / Sanctions

These codes indicate whether the business or associated individuals appear on sanctions lists:

| Code      | Description                                                                                           |
| --------- | ----------------------------------------------------------------------------------------------------- |
| **BI201** | No sanctions or OFAC listings are identified for the submitted business                               |
| **BI202** | No sanctions or OFAC listings are identified for the named individuals                                |
| **BR203** | Sanctions or OFAC listings appear to be associated with the submitted business                        |
| **BR204** | Sanctions or OFAC listings appear to be associated with one or more of the named individuals          |
| **BR205** | Sanctions or OFAC listings appear to be associated with certain individuals found in existing records |
| **BR705** | The provided business information is limited, incomplete, or of uncertain reliability                 |

### Registration & Standing

These codes provide information about the business's registration status:

| Code      | Description                                                                                        |
| --------- | -------------------------------------------------------------------------------------------------- |
| **BV101** | The business maintains state-level registrations in multiple jurisdictions                         |
| **BV102** | The business maintains registration solely in one jurisdiction                                     |
| **BV103** | The business is registered in a state frequently chosen for entity formation                       |
| **BV104** | No active state registrations are identified for the business                                      |
| **BV501** | Registration records indicate an active status and good standing in all relevant states            |
| **BV502** | Registration records indicate active status and good standing in certain states, while others vary |
| **BV503** | Registration records indicate an inactive status or poor standing in all identified states         |

### Address Characteristics

These codes provide additional information about the nature of the business addresses:

| Code      | Description                                                                                    |
| --------- | ---------------------------------------------------------------------------------------------- |
| **BI749** | At least one of the addresses provided is identified as commercial                             |
| **BI754** | At least one of the addresses provided appears to be a post office box                         |
| **BI755** | At least one of the addresses provided appears to be a virtual address                         |
| **BR748** | At least one of the addresses provided is identified as residential                            |
| **BR750** | At least one of the addresses provided appears to be that of a registered agent                |
| **BR751** | At least one of the addresses provided appears to be a Commercial Mail Receiving Agency (CMRA) |
| **BR752** | At least one of the addresses provided appears to be a private mailbox                         |
| **BR753** | At least one of the addresses provided is not currently accepting mail deliveries              |

### Location Usage

These codes indicate how many other businesses are using the same address:

| Code      | Description                                                                 |
| --------- | --------------------------------------------------------------------------- |
| **BI801** | At least one submitted location is shared by 1–20 other businesses          |
| **BI802** | At least one submitted location is shared by 21–100 other businesses        |
| **BI803** | At least one submitted location is shared by more than 100 other businesses |

### Entity Type

These codes identify the legal structure of the business:

| Code      | Description                                                                      |
| --------- | -------------------------------------------------------------------------------- |
| **BI010** | Records indicate the business is structured as a corporation                     |
| **BI011** | Records indicate the business is structured as a limited liability company (LLC) |
| **BI012** | Records indicate the business is registered as a nonprofit entity                |
| **BI013** | Records indicate the business operates as a partnership                          |
| **BI014** | Records indicate the business is administered as a trust                         |

### Business Formation & History

These codes provide information about the business's establishment and history:

| Code       | Description                                                                       |
| ---------- | --------------------------------------------------------------------------------- |
| **BI500**  | Formation records indicate an establishment date older than two years             |
| **BI501**  | Formation records indicate the business was established within the past two years |
| **BI503**  | Formation records indicate the business was established within the past year      |
| **BI1101** | No record of any bankruptcy filings exists for the business                       |
| **BR502**  | Formation records indicate the business was established within the last month     |
| **BR1102** | Records indicate that the business has filed for bankruptcy                       |
| **BR1201** | The provided TIN for the business is flagged or subject to a denylist status      |

<Note>
  If you encounter any Business Identity codes not listed in this documentation, contact Straddle support for
  clarification. Our verification system is continuously evolving to provide more detailed insights and better fraud
  protection.
</Note>

## Using Business Identity Codes in Your Application

When implementing business verification in your application, you can use these codes to:

1. Automate decision-making based on verification outcomes
2. Implement custom workflows for businesses that require additional review
3. Provide specific feedback to users about their verification status
4. Track verification metrics to identify common issues or trends

## Best Practices for Business Verification

To maximize the effectiveness of your business verification process:

1. **Implement a tiered verification approach**: Use Business Identity codes to create different levels of verification based on risk and business type.

2. **Collect comprehensive business information**: The more detailed and accurate the initial business information, the more reliable the verification results will be.

3. **Consider industry-specific risks**: Some industries may require additional verification steps due to higher risk profiles.

4. **Provide clear feedback to users**: When a business fails verification, provide specific guidance on what information needs to be corrected.

5. **Monitor verification patterns**: Track common rejection reasons to identify potential improvements in your onboarding process.

6. **Implement periodic re-verification**: Business information can change over time, so consider implementing periodic re-verification for long-term customers.

<Tip>
  For businesses that require manual review, consider requesting additional documentation such as business licenses,
  articles of incorporation, or utility bills to verify the business address.
</Tip>

## Business Identity Scores

Straddle's Business Identity scores are calculated based on the Business Identity codes and provide a numerical representation of the business's verification status. These scores are not directly related to the business's creditworthiness or financial health.

The Risk Scores range from 0 to 1 in the API, and are based on the number of codes in each category. The higher the risk score, the more scrutiny the business should receive in the event of a `review` status being assigned to it.

## Testing Business Identity in Sandbox

In Straddle's Sandbox environment, you can test Business Identity verification by providing specific data in the `address` object, a `business` customer type, and data in the `compliance_profile`. Each input maps to a specific outcome.

| Address                                               | Status     |
| ----------------------------------------------------- | ---------- |
| 1234 Sandbox Street, PO Box I304, Mock City, CA 94105 | `review`   |
| 1234 Sandbox Street, PO Box I301, Mock City, CA 94105 | `verified` |
| 1234 Sandbox Street, PO Box I103, Mock City, CA 94105 | `rejected` |

Any data that is not in the above list will return a random result while in Sandbox, but always return the same output for the same input.