Is this within the guidelines?

[Hannahness]

I'm currently working for a client who has a site that is a directory of local businesses across the US. Many of these businesses do NOT have their own websites. According to Google Local's guidelines, "Only business owners or authorized representatives may verify their business listings on Google."
Since these businesses signed up of their own volition and don't have their own websites, would it be a violation of Google's guidelines to submit businesses on our site to Google Local?

[LifeinAsia]

I think the key phrase here is "authorized representatives." If your client has a specific program that offers Google Local verification as one of its services and the customers actually opted in to that program, then I'd say it's okay. But just because a business owner adds their business to that directory does NOT make that directory an authorized representative and in my book has no authority to do anything beyond adding the listing to their directory.

Otherwise, you run into a situation where a business owner may add their listing to 5 IYP sites. Each one of them decides on their own that they are an authorized representative for that business and try to verify the listing on Google Local. That is certainly something that Google wants to avoid.

[Silvery]

Your client is not an "authorized representative", so they absolutely shouldn't claim listings as their own.

HOWEVER, there are quite a lot of business directory sites which are data partners with Google, and Google Maps will take their feeds to enhance the listing data.

You should consider contacting Google Business Development for the Maps product, and see if they'd be interested in taking your feed of listings information. In return, you might get links back from Google Place pages which sport the data.