Company legal status in KYC API and KYC workspace

Company status is a vital data element not only for KYC, but also for a variety of other regulatory compliance use cases, including Know Your Supplier. Many of our clients register monitors for companies to catch status changes as soon as they happen on the register.

Official public records usually contain status information about entities. However, based on particularities of national company, tax or other types of compliance legislation, companies can have a plethora of statuses. Our KYB data experts carefully analyze specific statuses available on each register and map them in KYC API and KYC Workspace as follows:

• LIVE : The company has been incorporated and exists on the register of companies. Companies in liquidation or in bankruptcy, as well as temporarily suspended or inactive companies are still considered live.
• CLOSED : The company has been declared closed, following voluntary or involuntary dissolution. We will only display a closed status of a company when it is completely dissolved, and all the dissolution procedures have been completed. A company that has declared bankruptcy, for example, can be reorganized and become live again. Also, even when the register doesn’t provide status details, but publishes a dissolution date for a company, we consider that company closed.
• NOT REPORTED : The register does not provide company status, and there is no logic that can be applied to derive it from the available information.

However, many compliance processes rely on the nuances of company status. Therefore, LIVE or CLOSED may not be enough to inform our clients’ internal processes. Rather, the client needs to know if a company is in liquidation or has opened bankruptcy. Sometimes, a company being not “in good standing” due to failure to pay registry fees might inform our users’ risk profiling of their clients.

To service these types of use cases, whenever we get clear granular status from the registers, we make sure to display it as extradData.providedStatus, in KYC API, and as ‘Additional Status Details’ in KYC Workspace.

Every jurisdiction is unique in providing status data. While in, for example, US – state of New York, companies can have one of only three statuses (active, inactive, or suspended) and Indonesian companies one of only two statuses, inthe state of North Carolina (US) there are 31 distinct statuses, in Bahrain – 41, and in Denmark – 19. In Botswana, for example, there is a total of four statuses, whereby ‘registered’, ‘amalgamated’ and ‘in liquidation’ are considered live companies, while ‘removed/cancelled’ are considered closed. In some cases, the registers will even provide granular statuses on closed companies as well, outlining the dissolution procedure. In contrast, in Norway, for example, we can only differentiate between LIVE and CLOSED companies, as no additional status details are provided by the register.

Some jurisdictions have legislation in place that allows companies to be “revived” and become LIVE after they have been CLOSED, provided they fulfill a set of conditions. This has no effect on our status mapping, as we source the status details in real time directly from the register.

In many cases, the data sets the register makes available for live companies differ from those provided for closed companies. Closed companies have far less detail, and in most cases the register does not provide any documents.

In case you have detailed questions about company statuses for a specific jurisdiction, please contact our KYB data expert team: ma_kom_support@moodys.com.