Business Address Verification: An Integral Part of KYB

Business address verification is an integral part of knowing your business. The business address is collected using the Know Your Business process with relevant documents. These documents include rental agreements, tax returns, and utility bills. However, these documents are insufficient for some business verification, so additional documents are required. Each and every document must have the name of the business or its owner; otherwise, it will not pass the verification process. Lease agreements, utility bills including electricity, gas, water, internet, and articles of Incorporation must have the owner’s name. Read this article for valuable insights about the address proof, its importance, and its process. 

How to Verify Business Address? 

The primary requirement for the business address verification is the proof of address. It is collected to confirm the company identity for which a recent document with the current address is required. These documents are reviewed and referenced to cross-check the physical address. Usually, the necessary documents are as follows: 

  • Rental agreements or lease
  • Mortgage statements
  • Bank statements
  • Utility bills
  • Insurance policies 
  • Official government documents 

All the documents mentioned above must have the physical address of teh business, but the owner’s name can be in the lessor’s name. 

Types of Invalid Addresses

In the business address verification process, some of them are found invalid. It’s not always the case that an invalid business address is not real. There are several reasons for the existence of physical addresses. 

  • Imaginary Address

Some of teh companies want to hide their physical address, so they rely on hypothetical ones. The address comprises a house number or street number and the address of the building torn down six months ago. So, this sort of fake or hypothetical address will be identified as invalid. 

  • Incorrect Address

Addresses that are poorly spelled or formatted make no sense. The wrong information may be the problem; this could be a mix-up of house number or street number. These types of addresses are considered incorrect. 

  • Unoccupied Address

The mailing address of the business may be currently vacant or new. There is nobody to receive the mail on the given address. This type of address is not found in the official databases, that is why it does not get validated.   

  • Unregistered Address

Various companies do not register their addresses with the United States Postal Service (USPS). The reason is that the company plans to relocate to a new building or does not want to receive mail. All unregistered addresses in the USPS system are missing in official databases and will be tagged as invalid addresses. 

Importance of Global Address Verification

Business verification is crucial to build secure financial relations. A corporation relies on the KYB process for which purpose business address verification is necessary. Screening of business addresses is done against the databases of legal authorities. Proof of address is required to apply AML checks over companies to identify risks. Companies involved in money laundering and other financial crimes are exposed to hefty fines and fraud. This will badly affect the bottom line of the business and its reputation. 

However, the verified physical address of teh business indicates its legitimacy. Business address verification ensures third parties that a company is secure to do business with. The company complies with anti-money laundering AML regulations, so there is less risk of fraud. Every region has its own. Safe and healthy financial relations are built in the market, which ultimately improves the business’s reputation.   

Business Address Verification Service Providers

Business address verification is a must-take service when onboarding third parties. Corporations must rely on professional service providers to verify the physical address of the business in question. Expert service providers have many authentic databases and utilize best practices to validate company addresses. Third parties are asked to submit the relevant documents; the next step is to analyze them. Once the business address is verified, it helps to smooth bond-making with others. The registered physical address builds trust in the market and is reliable for doing business. Companies with invalid addresses are identified to mitigate the challenges and fraud prevention. In the end, transparent financial relations are built with great confidence.       

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