---
id: KB-LE-019
url: https://app.codecontract.io/help/legal/knowing-who-you-are-working-with
idioma: en
categoria: sector-legal
subcategoria: compliance
audiencia: usuario
nivel: avanzado
actualizado: 2026-08-13
tambienEn: [es]
relacionados: [KB-LE-009, KB-LE-004]
citadoPor: [KB-LE-024, KB-LE-031]
---

# Knowing who you are working with

_In some activities, taking on a client means checking who they really are — and doing it before you start._

**Responde a:** client identification before starting · beneficial owner documentation · obliged entity what must i check · client acceptance file

A new client arrives with an urgent job. Documentation gets requested «as we go», because nobody wants to open by raising objections. Three months later, when things get complicated, it turns out all that is known about the client is a trading name — and that whoever was signing did not hold the authority they claimed.

**Beneficial owner** — The natural person actually behind it. Not the director who signs nor the company on the contract: whoever controls. Identifying them is precisely where a superficial check parts company with a real one.

## The four steps, and where people skip

| Step | What is checked | The shortcut taken |
| --- | --- | --- |
| Who they are | Identity of the person or company | Accepting whatever the introduction email says |
| Who really controls | The beneficial owner behind the company | Skipped once the structure has two levels |
| Who may sign | Current powers and their scope | The power is read, its currency is not |
| Where the money comes from | Source of funds, depending on the case | Assumed, because the client «is known to us» |

> [!IMPORTANT]
> The rule that avoids 90 % of the trouble is about timing, not content: **the check happens BEFORE starting, not alongside**. Once you have worked for a month, saying no is an expensive decision, which is why it almost never gets taken. Starting without checking is not gaining time: it is giving up the only window in which saying no is cheap.

## What makes the file useful later

1. **Keep what you checked and WHEN** — Undated, you cannot show it happened before starting.
2. **Note what you could not check, and why** — An explained gap is defensible; a silent one is not.
3. **Review whenever something changes** — Change of director, of ownership, of activity or of how they pay.
4. **And look again periodically even when nothing changes** — A four-year-old check describes a four-year-old company.

> [!WARNING]
> The most repeated blind spot is the long-standing client: **reviews are run on new clients and never on old ones**. The file of the client of eight years holds day-one documentation, and in those eight years they have changed owner, sector and billing country. A periodic sweep of the old portfolio turns up more than ten checks on new arrivals — and it is precisely the one nobody schedules, because there is nobody waiting on the other end of the phone.

## When something does not add up

**En corto**

- Write the doubt down as it arises, with a date: what is badly remembered is remembered late.
- Separate «a document is missing» from «what I am being told does not add up»: different things.
- And decide consciously, recording who decided to continue or to stop.

> [!NOTE]
> Who counts as an obliged entity, which checks correspond to each case, when there is a duty to report and what may NOT be told to the client is set by anti-money-laundering rules and their implementation. **Your adviser or compliance officer settles that, and it is not improvised**; here we cover the documentary side: check first, keep it dated, and look again.

**Does this apply to my activity?**

It depends on sector and transaction. That is exactly the question to take to your adviser beforehand.

**How often do I review long-standing clients?**

On a frequency you set, and whenever something relevant changes.

**Can I start while completing the documentation?**

It is the most expensive decision available. If taken, take it in writing and with a deadline.

## Ejemplos

**A new client arrives with an urgent job and documentation is requested «as we go».**

- Completes the check before starting and records the date on file

→ If saying no is required, it gets said while it is still cheap.

**The file of an eight-year client holds day-one documentation only.**

- Schedules a periodic sweep of the existing portfolio, not only of new arrivals

→ Changes of owner, sector or country stop going unnoticed for years.

**Whoever signed for the client held a power of attorney that had been revoked.**

- Checks that the power is current, not merely that it exists, and records the date

→ What was signed stands, because it is on record that the signatory could sign that day.

**Work starts without checking who with.**

- Runs the checks before accepting

→ The decision is taken with information.

**There is no record of what was checked or when.**

- Records the checks performed

→ The decision is explicable afterwards.

**The information is checked once and never again.**

- Schedules a periodic review

→ The record stays true.