Create A Business Customer

On the Synctera platform, the business resource represents an organization that can be an account holder or the owner of another business.

Use this API to represent businesses, including sole proprietorships.

A business resource contains identification information such as name, employer identification number, address, phone number and email address. It also contains status attributes to manage the lifecycle of the object. A business can progress from a prospect to an active business to an inactive former customer. A business is one of the core entities on Synctera. Benefical Owners, Accounts, ACH and cards are all tied to the business resource.

This guide will walk you through a simple example of creating a business and collecting enough information to run KYB and create an account for the business.
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Business Creation Steps

The following steps will walk you through the creation of a business that can transact on the Synctera platform

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The curl examples assume you have set up baseurl and apikey environment variables. See Base URLs and Authentication for instructions. Some examples depend on identifiers generated by previous steps. These are indicated like {BUSINESS_ID}.

1. Create a Person

You'll need to collect identity information of the person acting on behalf of the business. Typically this person is a beneficial owner or manager of the business and the one signing up for your product. If they aren't, you'll want to review business documentation to verify their affiliation with the business before creating an account for the business.

The following snippet creates a personal customer. One field to note is is_customer, here we've set it to false, if you want to enable this customer to also transact on the platform you'll need to set is_customer to true.

curl \
  -X POST \
  $baseurl/v0/persons \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  --data-binary '
  {
    "first_name": "John",
    "middle_name": "James",
    "last_name": "Doe",
    "dob": "1981-09-14",
    "email": "[email protected]",
    "phone_number": "+16055512212",
    "ssn": "456-78-9999",
    "legal_address": {
      "address_line_1": "123 Main St.",
      "city": "San Francisco",
      "state": "CA",
      "postal_code": "94105",
      "country_code": "US"
    },
    "is_customer": false,
    "status": "ACTIVE"
  }'

We'll use the id from the response to identify the person taking actions on behalf of the business.

2. Create Business

When initially creating a business customer, you can use the PROSPECT status to indicate that it is not yet fully configured. If not all attributes (e.g. addresses) are available, they can be added later. Set is_customer to true to indicate that this business can be an account holder, rather than just an owner.

curl \
  -X POST \
  $baseurl/v0/businesses \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  --data-binary '
  {
    "status": "PROSPECT",
    "is_customer": true,
    "entity_name": "Acme Trap Company",
    "trade_names": [
      "Acme",
      "Acme Corp",
      "CorporationID#77231"
    ],
    "formation_date": "2000-01-01",
    "formation_state": "NY",
    "structure": "CORPORATION",
    "phone_number": "+12124567890",
    "ein": "12-3456789",
    "legal_address": {
      "address_line_1": "50 Main St",
      "city": "New York",
      "state": "NY",
      "postal_code": "12345",
      "country_code": "US"
    }
}'

This will return a response with the created business:

{
  "creation_time": "2022-04-29T21:12:55.179008Z",
  "ein": "12-3456789",
  "entity_name": "Acme Trap Company",
  "formation_date": "2000-01-01",
  "formation_state": "NY",
  "id": "{BUSINESS_ID}",
  "is_customer": true,
  "last_updated_time": "2022-04-29T21:12:55.179008Z",
  "legal_address": {
    "address_line_1": "50 Main St",
    "city": "New York",
    "country_code": "US",
    "postal_code": "12345",
    "state": "NY"
  },
  "phone_number": "+12124567890",
  "status": "PROSPECT",
  "structure": "CORPORATION",
  "trade_names": ["Acme", "Acme Corp", "CorporationID#77231"],
  "verification_status": "UNVERIFIED"
}

Note the returned id attribute. This is used for future GET, PATCH and DELETE requests, as well as to link this business to other objects like disclosures and accounts.

3. Business Ownership

You must now capture the ownership structure of the business. This is required for KYB verification and compliance. Federal regulation requires financial institutions to obtain, verify and record information about the beneficial owners of legal entities.

Beneficial Owners

A business can have owners that are people or other businesses. We refer to people that are owners as beneficial owners. Businesses that are owners can in turn have owners and beneficial owners. For this example, we will use the simplest ownership structure: a single beneficial owner. See KYC/KYB Verification for more details and complex examples.

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What information do I have to provide?

You must provide sufficient information to KYC such as name, address, date of birth and Social Security number (or passport number or other similar information, in the case of foreign persons) for the following individuals (i.e., the beneficial owners):

Each individual, if any, who owns, directly or indirectly, 25 percent or more of the equity interests of the legal entity customer (e.g., each natural person that owns 25 percent or more of the shares of a corporation); Note, depending on risk some banks my require information of beneficial owners with a smaller share of the business.
And an individual with significant responsibility for managing the legal entity customer (e.g., a Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President, or Treasurer).

You can use the id of the person created in step 1 or add separate personal customers as beneficial owners. Below is a snippet of creating a personal customer resource and adding them as a beneficial owner of the business:

curl \
  -X POST \
  $baseurl/v0/persons \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  --data-binary '
  {
    "first_name": "Christopher",
    "middle_name": "James",
    "last_name": "Albertson",
    "dob": "1985-06-14",
    "email": "[email protected]",
    "phone_number": "+16045551212",
    "ssn": "456-78-9999",
    "legal_address": {
      "address_line_1": "456 Main St.",
      "city": "San Francisco",
      "state": "CA",
      "postal_code": "94105",
      "country_code": "US"
    },
    "is_customer": false,
    "status": "ACTIVE"
  }'

To add the personal customer as a beneficial owner, we'll take the resource id and create a beneficial owner relationship between the person and the business by calling the POST /relationships endpoint specifying relationship type: BENEFICIAL_OWNER_OF .

curl \
  -X POST \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  $baseurl/v0/relationships \
  --data-binary '
  {
    "from_person_id": "{PERSON_ID}",
    "relationship_type": "BENEFICIAL_OWNER_OF",
    "to_business_id": "{BUSINESS_ID}",
    "additional_data": {
      "percent_ownership": 100
    }
  }'

Business Managers

KYB also requires capturing at least one manging person of the business. A managing person is someone who can exercise significant control over the business such as executive officers or members of the board of directors. Create additional personal customers as necessary, then link them to the business using an MANAGING_PERSON_OF relationship.

curl \
  -X POST \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  $baseurl/v0/relationships \
  --data-binary '
  {
    "from_person_id": "{PERSON_ID}",
    "relationship_type": "MANAGING_PERSON_OF",
    "to_business_id": "{BUSINESS_ID}",
    "additional_data": {
      "title": "OFFICER"
    }
  }'

Owning Businesses

Lastly, you'll also need to collect information on any businesses that owns more than 25% of the business customer. Create another business resource to represent the owning business, then link the two by creating a OWNER_OF relationship.

curl \
  -X POST \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  $baseurl/v0/relationships \
  --data-binary '
  {
    "from_business_id": "{OWNING_BUSINESS_ID}",
    "relationship_type": "OWNER_OF",
    "to_business_id": "{OWNED_BUSINESS_ID}",
    "additional_data": {
      "percent_ownership": 25.1
    }
  }'

Once all business ownership information has been added, you'll need to have the agent entering information certify that the information collected is complete and correct. You can do so by displaying the following snippet of text to the agent and recording a OWNER_CERTIFICATION disclosure upon saving business information.

I certify to the best of my knowledge that the information entered is complete and correct.

4. Disclosures

The next step when onboarding a business is disclosing information to them, e.g. terms of service. We'll start with tracking the beneficial ownership certiffication

Beneficial Ownership Disclosure

To create a disclosure record tracking benefical ownership certification, you'll need the personal customer id of the personal customer entering in benefical owner information (Created in step 1) and id of the business. The personal customer should be related to the business as a BENEFICIAL_OWNER or a MANAGING_PERSON. If they aren't you should collect business formation documentation and verify the agent's relationship with the business.

If the person entering the information is not an existing customer, first a customer needs to be created that represents the person responsible for entering beneficial owner information.

Create a disclosure record with POST /v0/disclosures, passing in the personal customer id, business id and the OWNER_CERTIFICATION disclosure type. Here acknowledging_person_id and business_id are required fields.

curl \
  -X POST \
  $baseurl/v0/disclosures \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  --data-binary '
  {
    "acknowledging_person_id": "{PERSON_ID}",
    "business_id": "{BUSINESS_ID}"
    "type": "OWNER_CERTIFICATION",
    "version": "1.0",
    "event_type": "ACKNOWLEDGED",
    "disclosure_date": "2022-04-17T02:04:34Z"
  }'

This will respond with a disclosure object:

{
  "acknowledging_person_id": "{PERSON_ID}",
  "business_id": "{BUSINESS_ID}",
  "creation_time": "2022-04-29T21:14:24.953307Z",
  "disclosure_date": "2022-04-17T00:00:00Z",
  "event_type": "ACKNOWLEDGED",
  "id": "{DISCLOSURE_ID}",
  "last_updated_time": "2022-04-29T21:14:24.953307Z",
  "type": "OWNER_CERTIFICATION",
  "version": "1.0"
}

Disclosure records

For other disclosure types such as REG_E or ESIGN, you can create a record using the same disclosure request with an update appropriate type. You'll need to work with your Synctera partner to determine the type of disclosures that you'll need to record for your business.

curl \
  -X POST \
  $baseurl/v0/disclosures \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  --data-binary '
  {
    "business_id": "{BUSINESS_ID}",
    "type": "REG_E",
    "version": "1.0",
    "event_type": "ACKNOWLEDGED",
    "disclosure_date": "2022-04-17T02:04:34Z",
    "acknowledging_person_id": "{PERSON_ID}"
  }'

5. Activating the Business

Once you've collected enough information to run KYB and the entity is ready to engage in business activites on your platform, you can update the business to ACTIVE using PATCH /v0/businesses/{BUSINESS_ID}:

curl \
  -X PATCH \
  $baseurl/v0/businesses/{BUSINESS_ID} \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  --data-binary '
{
  "status": "ACTIVE"
}'

6. Run KYB

While the new business now has a status of ACTIVE, its verification_status is still UNVERIFIED, so its will not be able to perform most banking activities. The next step is to verify the business's identity using a Know Your Business (KYB) verification. See the KYC/KYB Verification section of this guide for more details as well as descriptions of other types of verification and risk checks.

Run a verification using POST /v0/verifications/verify, e.g.:

curl \
  -X POST \
  $baseurl/v0/verifications/verify \
  -H "Authorization: Bearer $apikey" \
  -H 'Content-Type: application/json' \
  --data-binary '
{
  "customer_consent": true,
  "customer_ip_address": "{CUSTOMER_IP_ADDRESS}",
  "business_id": "{BUSINESS_ID}"
}'

This will return a list of all the verifications that were run, and a result for each.

If the verifications passed, the business's verification_status will now be ACCEPTED. This can be checked by a GET /v0/businesses/{BUSINESS_ID}:

curl \
  -H "Authorization: Bearer $apikey" \
  $baseurl/v0/businesses/{BUSINESS_ID}

which will respond with:

{
  "creation_time": "2022-04-29T21:12:55.179008Z",
  "ein": "12-3456789",
  "entity_name": "Acme Trap Company",
  "formation_date": "2000-01-01",
  "formation_state": "NY",
  "id": "{BUSINESS_ID}",
  "is_customer": true,
  "last_updated_time": "2022-04-29T21:19:09.521182Z",
  "legal_address": {
    "address_line_1": "50 Main St",
    "city": "New York",
    "country_code": "US",
    "postal_code": "12345",
    "state": "NY"
  },
  "phone_number": "+12124567890",
  "status": "ACTIVE",
  "structure": "CORPORATION",
  "trade_names": ["Acme", "Acme Corp", "CorporationID#77231"],
  "verification_last_run": "2022-04-29T21:19:09.432601Z",
  "verification_status": "ACCEPTED"
}

7. Use the Business with Other APIs

An active business can be used with other Synctera APIs:

• The Accounts API can create and manage accounts with the business as an account holder.
• The Cards API can create and manage credit or debit cards linked to the business.
• The Relationships API can link the business to another business as an owner.
• The Watchlists API can link a business with one or more watchlist monitoring subscriptions so that you can check for a business's presence on security risk watchlists.

Business Status Attributes

The business object contains two status attributes:

• status is an editable attribute representing the administrative state of the business. The integrator can use this to indicate whether they consider the business to be active, dormant, etc.
• verification_status is a read-only attribute representing the results of the verification process. This is updated by the Synctera platform when verification actions, e.g. KYB checks, are performed.

The ability to participate in money movement transactions, issue cards, etc, is limited by both the status and verification_status attributes.

Business Status

The business object's status attribute can have the following values.

It is up to the integrator to decide what they consider an ACTIVE, FROZEN or INACTIVE business.

Note that all states other than ACTIVE are restricted and do not allow most banking operations.

These states are controlled by the integrator's API client. While there are no restrictions on state transitions, certain fields, e.g. entity_name, are required by all states except PROSPECT. Typical state transitions are:

%%{init: {"fontFamily": "sans-serif"}}%%
stateDiagram-v2
    [*] --> PROSPECT: Prospect identified
    PROSPECT --> ACTIVE: Prospect qualified
    ACTIVE --> INACTIVE: Closed accounts
    ACTIVE --> FROZEN: Anomalous<br>activity
    FROZEN --> ACTIVE: Anomalies<br>resolved
    ACTIVE --> CANCELLED
    ACTIVE --> CONVERTED
    ACTIVE --> DISSOLVED
    ACTIVE --> MERGED
    ACTIVE --> SUSPENDED

Verification Status

In order to initiate transactions, an active business must also pass verification. There are different types of verification, including identity and watchlist checks.

Note that all states other than ACCEPTED are restricted and do not allow most banking operations.

See the KYC/KYB Verification section of this guide for details on how verfications are performed and the meaning of the results.

Additional Business Documentation Collection

To mitigate fraud and money laundering, we recommend gathering the following documentation. These items can be attached to business using our documents api.

• Legal entity organization documentation such as: articles of incorporation, partnership agreement, certificate of organization, operating agreement, etc.
• Money Services Business (MSB) Status is the legal entity a registered MSB? If so, the entity's FINCEN registration.
• Ongoing re-KYB (e.g. annually or bi-annually) is required for certain types of higher risk accounts subject to the Sponsor Bank’s policies and if there is any unusual activity that occurs in the account
  • Examples of higher risk business accounts include cash-intensive businesses, non-US businesses, crypto businesses, MSBs, and marijuana-related businesses. This may be dictated by your Sponsor Bank.