Client onboarding and AML

KYC Documentation

Learning Outcome

KYC Documentation

KYC Documents are official proofs used to verify a client's identity, address, and financial background before allowing them to access financial products or services.

KYC documentation falls into two broad categories:

Description

Individual KYC

Retail investors, salaried individuals, sole proprietors, HUFs (Hindu Undivided Families)

Corporate KYC

Category

Part A — Individual KYC Documents 

PAN Card  (Permanent Account Number)

Purpose: Unique 10-character alphanumeric tax identity issued to every Indian taxpayer. Mandatory for all financial transactions above Rs.50,000.

Issued By: Income Tax Department, Government of India

Validity: Lifetime validity — no expiry date

Regulatory Basis: Section 139A of Income Tax Act, 1961 | PMLA Rules | SEBI KYC norms 

Aadhaar Card  (Unique Identification Number)

Purpose: 12-digit biometric identity number that captures fingerprints and iris scans. Serves as both identity and address proof.

Issued By: UIDAI — Unique Identification Authority of India

Validity: Lifetime validity. Address can be updated; core biometrics remain fixed

Regulatory Basis: Aadhaar Act, 2016 | PMLA Rules | RBI KYC Master Direction

Passport

Purpose: Official government-issued travel document that proves citizenship and identity. Accepted globally as the strongest form of identity proof.

Issued By: Ministry of External Affairs, Government of India (Passport Seva Kendra)

Validity: 10 years for adults (18+) | 5 years for minors (below 18). Renewable.

Regulatory Basis: Passports Act, 1967 | FEMA | PMLA Rules | FATF Recommendation 10 

Address Proof

Meaning- Address Proof confirms where the client currently lives. It must be a document issued by a recognised authority, not older than 3 months (for utility bills and bank statements), and must clearly show the client's name and full address.

Part B — Corporate KYC Documents 

Meaning- When a company, firm, or institution opens a financial account, KYC is done at two levels: (1) verifying the entity itself, and (2) verifying the individuals who own or control it (Ultimate Beneficial Owners — UBOs).

Corporate KYC — Document-by-Document Breakdown:

 Certificate of Incorporation  (COI)

Purpose: Official proof that the company legally exists as a registered entity under the Companies Act, 2013.

Issued By: Ministry of Corporate Affairs (MCA) via Registrar of Companies (ROC)

Validity: Lifetime — valid as long as the company exists

Regulatory Basis: Companies Act, 2013 | Section 7 | RBI KYC Master Direction

MOA & AOA  (Memorandum & Articles of Association)

Purpose: MOA defines the company's objectives and scope of business. AOA defines the internal rules, governance structure, and powers of directors.

Issued By: Filed with ROC at time of incorporation — certified copies from MCA

Validity: Valid as long as the company is registered (updated versions if amendments made)

Regulatory Basis: Companies Act, 2013 | Sections 4 & 5 

Board Resolution

Purpose: A formal written decision passed by the Board of Directors authorising specific individuals to open and operate a bank or financial account on behalf of the company.

Issued By: Issued internally by the company's Board of Directors — certified by Company Secretary

Validity: Valid until revoked by another Board Resolution

Regulatory Basis: Companies Act, 2013 | Banking Companies Act | RBI Guidelines 

 PAN of the Company

Purpose: Every registered company, LLP, firm, or trust must have its own PAN — distinct from the personal PAN of its directors or partners.

Issued By: Income Tax Department, Government of India

Validity: Lifetime — no expiry

Regulatory Basis: Section 139A Income Tax Act | PMLA Rules | SEBI circular

Individual KYC of Directors / Partners / Authorised Signatories

Purpose: Every individual who controls, owns, or operates the company must submit their personal KYC documents — PAN, Aadhaar, and address proof.

Issued By: Each individual director/partner submits their own documents

Validity: Must be refreshed every 2 years for high-risk clients; every 8-10 years for low-risk

Regulatory Basis: PMLA, 2002 | RBI Master Direction on KYC | FATF Recommendation 24 (Beneficial Ownership) 

Who Must Submit Individual KYC:

• All directors of a Private/Public Limited Company

• All partners of a Partnership Firm or LLP

• Trustees and beneficiaries of a Trust

• Authorised signatories named in the Board Resolution

• Ultimate Beneficial Owners (UBOs) — individuals holding >25% ownership

Why This Matters: Shell companies are often used to hide money laundering. By KYC-ing every individual behind a company, institutions can identify the real human beings ultimately controlling the funds.

Additional Corporate Documents (Situation-Specific):

Summary

Quiz

Which document serves as a unique tax identity for individuals and companies in India?

Quiz-Answer

Which document serves as a unique tax identity for individuals and companies in India?