An operating location is a physical address where a business actually conducts operations, serves customers, or employs staff. This is distinct from registered addresses, mailing addresses, or registered agent locations.
Operating vs. Registered Address
Operating location
- Purpose: Where business happens
- Example: Retail store, office, warehouse
Registered address
- Purpose: Legal contact point
- Example: Registered agent in Delaware
Mailing address
- Purpose: Correspondence
- Example: P.O. box or mail service
Principal office
- Purpose: Official headquarters
- Example: May or may not be operational
A business might have all four pointing to different places—or a registered agent address that's nowhere near actual operations.
Why Operating Locations Matter
Verification
Operating locations provide evidence of real business activity:
- Physical presence indicates the business exists
- Employees and customers interact at these addresses
- Operations generate observable signals (utilities, foot traffic, transactions)
Risk Assessment
Operating location patterns reveal risk:
- Business with no identifiable operating location → shell company indicator
- Operating location in high-risk area → geographic risk factor
- Discrepancy between stated and actual location → verification concern
Compliance
Regulators expect businesses to have real presence:
- KYB requires understanding where businesses operate
- Geographic factors affect regulatory jurisdiction
- Local licensing depends on operating location
Identifying Operating Locations
Data Sources
- Web presence: Business websites list addresses
- Google/Maps listings: Operating locations with reviews
- Transaction data: Card transactions occur at physical locations
- Utility records: Service addresses indicate operations
- Employment data: Where employees are located
- Site visits: Direct verification
Verification Signals
Strong operating location indicators:
- Multiple data sources confirm same address
- Transaction activity at the location
- Customer reviews mentioning the location
- Visible business presence (storefront, signage)
- Local business licenses
Weak or absent indicators:
- Only registered agent address available
- Address is a virtual office or mail drop
- No transaction or web presence at location
- Multiple unrelated businesses at same address
The Virtual Office Problem
Virtual office services provide:
- Professional mailing address
- Phone answering
- Occasional meeting space
These addresses aren't operating locations—they're services. A business using only a virtual office may have:
- Remote operations (legitimate)
- No real operations (suspicious)
- Operations elsewhere (needs investigation)
Multi-Location Businesses
Larger businesses have multiple operating locations:
- Retail chains with many stores
- Service businesses covering territories
- Headquarters vs. branch locations
Business identity connects the legal entity to all its operating locations.
Operating Locations in KYB
Verification Process
- Collect stated operating address
- Cross-reference against multiple data sources
- Check for transaction or operational signals
- Verify address isn't just agent/mail service
- Assess alignment with stated business type
Red Flags
- No operating location can be identified
- Stated location is known mail drop
- Location doesn't match business type (manufacturing company at residential address)
- Frequent location changes with no business rationale
Key Takeaways
- Operating locations are where business actually happens—not just registration points
- Registered address ≠ operating location—especially with commercial agents
- Multiple data sources verify true operating presence
- Location patterns reveal risk—no presence, virtual-only, or mismatches
- KYB must distinguish registered from operating addresses for accurate verification
Related: Registered Agent | Business Identity | Entity Verification
