Why the distinction matters
The two checks answer different questions, and doing one does not cover the other. KYC can confirm that the director of your new supplier is who they say they are, while saying nothing about whether the supplier itself can perform, pay its way, or survive the contract. KYS can confirm the supplier is solvent and trading, while saying nothing about whether the person signing for it has authority or a clean history.
What each covers
| KYC | KYS | |
|---|---|---|
| Subject | Individuals | Companies |
| Core question | Who is this person? | Can this business deliver and pay? |
| Typical checks | ID, sanctions, PEP, adverse media | Registration, accounts, judgments, petitions, charges |
| Driven by | AML rules (regulated firms must do it) | Credit and procurement policy (best practice) |
| What it misses | Whether the company can trade | Whether the people are clean |
When you need which
If you are a regulated firm (finance, legal, property, gambling), KYC on customers is a legal requirement under the Money Laundering Regulations, with supervisory enforcement behind it. KYS is not imposed by law in the same way, but a supplier that fails mid-contract costs real money, so procurement teams run KYS as standard for anything material.
For most businesses the practical answer is both, in proportion to the exposure: identity checks on the people you contract with, and a company check on the entity itself. The company check is what Black Flag Alert provides, and it is the half that most often gets skipped because the name on the invoice looked respectable.
Run the company half of the check free on any England & Wales business: registration, accounts, judgments, petitions and charges in one profile.