Institution Types and Members

Learn about institution types, member roles, and requirements

Institution Types

Institution Type

Institution type (institution_type) is the primary legal structure of the institution, which can be one of the following:

Institution Type	Description
CORPORATION	A legal entity that is separate and distinct from its owners
LLC	Limited Liability Company, a business structure that combines elements of partnerships and corporations
TRUST	A legal entity created to hold and manage assets for beneficiaries
PARTNERSHIP	A business relationship between two or more individuals who share management and profits
SOLE_PROPRIETORSHIP	An unincorporated business owned and run by one person, onboarded with a single owner-member

Institution Subtypes

Institution subtype (institution_sub_type) is the primary area of business activity of the institution, work with your Paxos Partner to understand the mapping from your institution subtypes to ours.

Paxos prohibits certain types of business activity (“Prohibited Businesses”) in accordance with its Compliance policies. The following non-exhaustive list is representative of the type of activity that Paxos prohibits on its platform. By creating a Paxos Identity, Paxos customers agree not to use Paxos services in connection with any of the following Prohibited Businesses.

• ADULT_ENTERTAINMENT
• DRUGS
• RANSOMWARE
• SHELL_BANK
• WEAPONS

Sole Proprietorships

A sole proprietorship is onboarded as an institution (institution_type = SOLE_PROPRIETORSHIP) with a single owner-member representing the person who runs the business. Available under Paxos Trust Company (PTC) licensing only — submissions under other licensing arrangements are rejected.

Aspect	Requirement
Members	Exactly one member, with role exactly [SOLE_PROPRIETOR] (optionally + ACCOUNT_OPENER). Zero-member or multi-member submissions are rejected. BENEFICIAL_OWNER, AUTHORIZED_USER, MANAGEMENT_CONTROL_PERSON, and DIRECTOR are not permitted on the owner-member, and no beneficial_owners / UBO are collected — the owner-member implicitly holds 100%.
Identification	cip_id_type = SSN (institution cip_id must match the owner-member’s CIP) or EIN (no match required). ITIN is not supported.
Regulation	Always PRIVATE and NON_REGULATED. Do not send other regulation_status or trading_type values; the regulated-institution validations do not apply.
Sub-type	institution_sub_type is required but not locked. MONEY_SERVICE_BUSINESS, FINANCIAL_INSTITUTION, and MARKET_MAKER route to manual review (slower approval) rather than rejection.
Screening	Both KYB (institution) and KYC (owner-member) run.

Required details

Field	Required
name	✅
business_address	✅
institution_type (SOLE_PROPRIETORSHIP)	✅
institution_sub_type	✅
cip_id	✅
cip_id_type (SSN or EIN)	✅
cip_id_country	✅
incorporation_address	Not applicable
has_underlying_trust_structure	Not applicable
has_nominee_shareholders	Not applicable
beneficial_owners	Not applicable

Creating Financially Regulated Institutions

Please refer to the following table for creating institutions which are financially regulated.

Regulation Status	Description
US_REGULATED	Institution financially regulated in the US
INTL_REGULATED	Institution financially regulated by an international entity
NON_REGULATED	Non-financially regulated institution

Note that each category of regulation_status then has additional validations tied to trading_type and other required fields.

Regulation Status	Trading Type	Fields Required	Notes
US_REGULATED	PRIVATE	regulator_name, regulator_jurisdiction, regulator_register_number	Not publicly traded
US_REGULATED	PUBLIC	listed_exchange, ticker_symbol, regulator_name, regulator_jurisdiction, regulator_register_number	Publicly traded
US_REGULATED	PUBLICLY_TRADED_SUBSIDIARY	listed_exchange, ticker_symbol, regulator_name, regulator_jurisdiction, regulator_register_number, parent_institution_name	Subsidiary of a publicly traded company
INTL_REGULATED	PRIVATE	regulator_name, regulator_jurisdiction, regulator_register_number	Not publicly traded
INTL_REGULATED	PUBLIC	listed_exchange, ticker_symbol, regulator_name, regulator_jurisdiction, regulator_register_number	Publicly traded
INTL_REGULATED	PUBLICLY_TRADED_SUBSIDIARY	listed_exchange, ticker_symbol, regulator_name, regulator_jurisdiction, regulator_register_number, parent_institution_name	Subsidiary of a publicly traded company
NON_REGULATED	PRIVATE	None	Not publicly traded
NON_REGULATED	PUBLIC	listed_exchange, ticker_symbol	Publicly traded

Note: NON_REGULATED only supports PRIVATE and PUBLIC trading types. PUBLICLY_TRADED_SUBSIDIARY is not supported for NON_REGULATED institutions.

Institution Members

Member Roles

Institution members can have one or more roles that define their relationship with the institution. Each role has specific requirements and applicability depending on the institution type:

Role	Description
BENEFICIAL_OWNER	Person who owns 25% or more of the institution.
ACCOUNT_OPENER	Person who opened the account on behalf of the institution.
AUTHORIZED_USER	Person authorized to transact on behalf of the institution.
MANAGEMENT_CONTROL_PERSON	Person with significant management control over the institution (e.g., CEO, CFO, COO).
TRUSTEE	Person who manages assets in a trust for beneficiaries and is legally responsible for the trust.
GRANTOR	Person who creates a trust by donating assets.
BENEFICIARY	Person who receives benefits from a trust.
SOLE_PROPRIETOR	Person who owns and operates a sole proprietorship. Used only for SOLE_PROPRIETORSHIP institutions.

Role Compatibility by Institution Type

The following grid shows which roles are applicable for each institution type:

Role	Trust	Corporation	LLC	Partnership	Sole Proprietorship
BENEFICIAL_OWNER	—	✅	✅	✅	—
AUTHORIZED_USER	—	✅	✅	✅	—
MANAGEMENT_CONTROL_PERSON	—	✅	✅	✅	—
TRUSTEE	✅	—	—	—	—
GRANTOR	✅	—	—	—	—
BENEFICIARY	✅	—	—	—	—
SOLE_PROPRIETOR	—	—	—	—	✅

• Trusts: A trust institution must have at least one member with one of the following roles: GRANTOR, TRUSTEE, or BENEFICIARY.
• Corporations, LLCs, Partnerships: These institutions typically require at least one BENEFICIAL_OWNER and one MANAGEMENT_CONTROL_PERSON.
• Sole Proprietorships: Exactly one member holding the SOLE_PROPRIETOR role (optionally also ACCOUNT_OPENER). See Sole Proprietorships.
• For all institution types, members must be Identity objects already created in the system.