Legal arrangements check

Account holders that conduct business with Adyen on behalf of another entity as established in a contractual agreement must also provide information about their agreement. We refer to contractual agreements as legal arrangements.

Some examples of legal arrangements are:

• Involvement in a trust. For example, a business is a corporate trustee and is conducting business on behalf of the trust.
• Sole proprietorship. An individual is registered as a sole proprietor in the country they are operating in.

You can onboard account holders with legal arrangements through:

• Hosted onboarding: HOP supports collecting requirements by default.
• Your own onboarding flow: Follow the steps on this page to collect documents and additional information in your UI and then send the information to Adyen. This requires API version 6.

The information that account holders provide will be part of the verification checks. Failing to declare legal arrangements can result in blocked payouts and account suspensions.

Types of legal arrangements

Account holders in your platform must provide additional information if they are part of the following legal arrangements.

• Association
  The account holder, along with one or more associates, manages and shares profits of the business in accordance with agreed upon articles of association.

• Partnership
  The account holder, along with one or more legal entities (partners), manage, operate and share profits of their jointly-owned business. The account holder is wholly or partially liable for the debts of the partnership.

• Sole proprietorship
  The individual is registered as a sole proprietor, operates the business on their own, and is personally liable for the debts of the sole proprietorship.

• Trust
  The account holder (as the trustee) holds and manages assets for the beneficiaries in an agreement laid out in the trust deed.

Supported legal arrangements

Adyen supports different legal arrangements for account holders operating in the following countries.

• Association: Both the account holder and the association must be operating and established in the US.
• Partnership: Australia, Singapore
• Sole proprietorship: Singapore
• Trust: Australia, Singapore

Except for associations, the country where the legal arrangement was established can be different from the account holder's country of operation.

Step 1: Collect the required information

Account holders that are part of a legal arrangement must provide the following additional information.

Adyen uses the information to run automatic verification checks on the legal arrangement and other parties involved. For example, in a partnership where the other partner is a private company, Adyen performs a company check. If the checks fail, Adyen might require the account holder to provide a document that proves the legal arrangement.

Step 2: Update the account holder

Update an existing account holder and send the information that you received from them in the legalArrangements array.

Requests using /updateAccountHolder are processed asynchronously. You'll receive a response to your API request, but you must rely on notification webhooks to know the final result of a request.

• The ACCOUNT_HOLDER_CREATED or ACCOUNT_HOLDER_UPDATED webhook: Informs you when the account holder has been successfully updated. You'll get the status of the checks in the verification object under the legalArrangements and legalArrangementsEntities arrays.
• ACCOUNT_HOLDER_VERIFICATION: Informs you of the status of the verification checks. For legal arrangement checks, refer to the kyCheckStatusData object with the type LEGAL_ARRANGEMENT_VERIFICATION.

The API response and the webhooks contain the Adyen-generated legalArrangementCode and legalArrangementEntityCode which you'll use to update the entries or upload documents.

Step 3: Upload a document

You only need to upload a document if:

• The account holder is part of a trust in Australia.
• The automatic verification failed and Adyen required the account holder to provide a document.

The document must prove the account holder's contractual agreement such as a registration or a constitutional document.

To upload a document, make a POST /uploadDocument request specifying:

• documentType set to CONSTITUTIONAL_DOCUMENT.
• The legalArrangementCode to which the document must be linked.
• The documentContent containing the document in Base64-encoded format.

In case Adyen is unable to verify the identity of the other members of the legal arrangement, then you'll also be required to upload documents for the member identified by the legalArrangementEntityCode.

Requests using /uploadDocument are processed asynchronously. You'll receive a response to your API request, but you must rely on notification webhooks to know the final result of a request.

• ACCOUNT_HOLDER_VERIFICATION: Informs you of the status of the verification checks. For legal arrangement checks, refer to the kyCheckStatusData object with the type LEGAL_ARRANGEMENT_VERIFICATION.

See also