Source of Funds (SoF) and Source of Wealth (SoW) documentation requirements for corporate accounts

If the client declares their SoF to be from a company sale, we must collect one of the following:

• Copy of contract of sale signed by solicitor/lawyer, plus bank statement showing the proceeds.

• Signed letter from solicitor/lawyer or regulated accountant incl. specifics of the sale i.e. date, amount, ID of the company.

Company profit is essentially the financial gain a company makes after subtracting all its expenses from its total revenue.

A company's revenue can come from various sources, depending on its business model and industry. Here are some common sources:

• Sales of Goods : Revenue from selling physical products, such as electronics, clothing, or food items.

• Services: Income from providing services, like consulting, maintenance, or legal advice.

• Rentals and Leases: Income from renting out property or equipment.

• Sales of real estate / subsidiary

• Investments: Earnings from investments, including dividends, interest, or capital gains.

• Subscriptions: Regular income from subscription-based services, such as streaming platforms or software-as-a-service (SaaS) products.

• Licensing Fees: Revenue from licensing intellectual property, such as patents, trademarks, or copyrighted content.

• Advertising: Revenue from selling advertising space, either online, in print, or on broadcast media.

• Royalties: Payments received for the use of the company's intellectual property, such as music, books, or technology. It’s a form of passive income.

It is essential that we collect trustworthy documentation of the company’s accounts and financial activities. However, not all companies are legally obliged to audit their financial statements therefore in such cases we collect all of the following:

• Financial Statement (not in draft or project version) signed by the director.

• Tax documentation (Tax Submission and Tax Return document).

OR

• Proof of submission to the tax authority.

This is a minimum requirement, so more could be necessary to collect depending on the circumstances. And in some jurisdictions, it is not possible to acquire proof of tax submission.

Multiple Financial Statements may be collected depending on the case and risk, but the general approach should be to always collect the latest annual audited financial statement.

In some case the financial statements do not give enough details or are not reflecting the recent revenue of the company to clarify the SOF, therefore additional/substitute documents may be collected, or external research performed on trusted open sources.

E.g.: the latest available financial statement displays the result in X, but the sale of subsidiary happens in X+1 therefore won't be reflected in the X financial statement. In that situation a sale agreement or share transfer agreement could be requested.

If the client declares their SoF originates from a loan, it is relevant to establish the source of the loan as it will influence the documentation we need to collect.

If the loan was provided by a financial institution, we only need to collect the loan agreement issued by the loan provider.

If the loan was provided by a private person or a company, where providing loans is not part of their usual business, we need to collect all the following:

• The loan agreement between the loan provider and the loan borrower.

• Documentation of the transfer of the loan amount from the specified loan provider, such as a bank statement showing the complete transfer amount.

• A description clarifying the purpose of the loan.

• Documentation of how the loan provider accumulated the funds, which have been loaned out.

When the SoF originates from a client’s previous trading activity, we need to collect:

• Trading account statement

• Portfolio statement

In addition, we must understand how the client generated the funds which were originally used to trade with. Generally, an explanation from the client will suffice and we do not need to collect additional documentation related to the original source of funds.

Inter-company payments are defined as any type of financial transaction between two or more affiliated companies within the same ownership structure or corporate group.

If the client declares that their SoF originate from inter-company payments, then we must collect all of the following:

• An explanation of the purpose of the payments .

• Financial Statement (not in draft or project version) signed by the director.

• Tax documentation (Tax Submission and Tax Return document).

OR

• Proof of submission to the tax authority.

• If the payment is recent, we need a proof showing the amount and date of the payment.

If a client declares their SoF originates from dividends distributed by another corporate entity (corporate to corporate), it is essential that we collect trustworthy documentation of the company’s accounts and financial activities. However, not all companies are legally obliged to audit their financial statements therefore in such cases we collect all the following:

• Financial Statement (not in draft or project version) signed by the director.

• Tax documentation (Tax Submission and Tax Return document).

OR

• Proof of submission to the tax authority.

Can also be accepted:

• Minutes confirming the dividend distribution (detailed) and

• Bank statements showing the date of receipt and amount of funds (ideally from client and subsidiary).

If the client declares that their SoF originates from cash injections / new equity, then we must collect all of the following:

• Explanation of the relationship between the receiver company and the creditor, as well as the purpose of the cash Injections.

• Audited Financial Statement

• Bank statement capturing the immediate payment, in full or part, from the creditor’s account to the company’s account (our client).

• Documentation of how the creditors have generated their funds.

If the client declares that their SoF originates from operating cash flow, and the financial statements are not audited (because not all companies are legally obliged to audit their financial statements), we collect all the following:

• Financial Statement (not in draft or project version) signed by the director,

• Tax documentation (Tax Submission and Tax Return document),

OR

• Proof of submission to the tax authority.

• Rationale for why the client is investing their operating cash flow.

If the client declares that their SoF originate from a sale of real estate, then we must collect one of following:

• Signed letter from solicitor/lawyer; or regulated accountant; or

• Signed letter from estate agent (if applicable); or

• Copy of sale contract signed by seller and buyer.

Generally, for income from the trade or sale of crypto assets, we need to collect the following documents:

• Trading account statement

• Portfolio statement

In addition, we must understand how the client generated the funds which were originally used to trade with. Generally, an explanation from the client will suffice and we do not need to collect additional documentation related to the original source of funds.

However, in certain scenarios, we need to collect additional information such as:

• SOF documentation related to the original source of funds used to purchase crypto assets,

• understanding of the client’s crypto trading activity

• type of exchange/wallet used

Therefore, we could ask the clients for additional questions related to their crypto-trading activities.