What Is a Principal Place of Business?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 07 November 2019
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A principal place of business is the location of the central operation that houses the executive offices of a company. Also known as a head office, the facility is also likely to be the location of the accounting and other key functions that are important to the ongoing operation of the business. A head office location may be situated away from the manufacturing or production facilities operated by the corporation, or co-located with those facilities.

Depending on the structure of the corporation, several key functions may be located at the principal place of business. Along with executive offices, it is not unusual for national directors or managers to also be located at the head office. These directors coordinate the efforts of personnel who work at local offices or plant facilities, providing a structured line of communication from the local level to the central hub of the business operation. This approach to organization can aid in maintaining uniformity in the way various company policies and procedures are implemented in all company locations.


Another key company function that is often based out of the principal place of business is management of the company’s sales efforts. A director coordinates the sales efforts with the assistance of a team of sales managers who oversee various geographic sales territories, as defined by the head office. Communication can flow from the director to each territorial manager, who in turn passes the communication on to local sales supervisors, and ultimately to each sales professional currently employed by the company. This structure makes it relatively easy to ascertain the current status of the overall sales effort, including what areas are generating sales above their projected figures, and which areas are not performing up to standards.

The principal place of business is also often the hub for the distribution of information to investors. This function is often managed under the direction of a corporate director of finance, or a chief financial officer. In order to compile financial data for presentation to investors, the director is likely to have a staff of financial personnel located at the corporate office. The staff is constantly gathering data from their counterparts at other locations of the company, thus ensuring that the data maintained at the head office is always up to date.

In most countries, the principal place of business also functions as the main address for the company. The head office location is listed on all legal documents pertaining to the incorporation, including the local business license, articles of incorporation, and any other documents that must be registered with local or state authorities. In the event of a change of the company structure that necessitates a relocation of the principal place of business, all documents must be updated to reflect the change.


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