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Governance: Company registration details

The following indicator is under consideration for this pilot edition of the Barometer: To what extent do relevant laws, regulations, policies and guidance provide a basis for collecting and publishing structured data from company registers?

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You are looking at a draft indicator to be included in the expert survey of the Global Data Barometer. Between now and May 10th we are inviting your feedback on this indicator and the elements it contains. You can provide your feedback by (a) completing the feedback form below; or (b) adding in-line annotations.

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You can share your feedback on the Governance: Company registration details indicator here, or make use of Hypothes.is annotations

Show/hide supporting questions

Existence

  • Are there laws, policies or regulations requiring collection or publication of this information in any form?

    • No
    • They are being drafted, or are not yet implemented.
      Supporting questions: Please provide brief details
    • They exist and are operational

  • Do relevant laws, policies, regulations or guidance discuss collection and publication of structured and open data?

    • Relevant laws, policies and guidance explicitly create barriers to collecting and publishing structured data
      Supporting questions: Please briefly detail the barriers created (e.g. requirements for paper-based filing only)
    • There is no mention of data in relevant laws, policies or guidance
    • Requirements to collect data are set out in non-binding policy or guidance
      Supporting questions: Please provide a URL to the most relevant legislation, policy or guidance
    • Requirements to collect data are set out in binding policy, regulations or law
      Supporting questions: Please provide a URL to the most relevant legislation, policy or guidance
    • Requirements to publish data are set out in non-binding policy or guidance
      Supporting questions: Please provide a URL to the most relevant legislation, policy or guidance
    • Requirements to publish data are set out in binding policy or law
      Supporting questions: Please provide a URL to the most relevant legislation, policy or guidance

Elements

Part 1: What do the rules or guidance related to structured data cover?

  • The framework requires collection of data on directors and shareholders (No, Partially, Yes)

  • Basic company information, including company name, legal form, status, and registered address (No, Partially, Yes)

    Supporting questions (conditional)

    If Partially: If one or more of the basic company data features is not covered, please list which (e.g. registered address)

  • Structured data on the shareholders of each company (No, Partially, Yes)

  • Regularly updated and structured financial data (No, Partially, Yes)

    Supporting questions (conditional)

    If No: (Optional) Is structured company accounting data collected through any other mechanism or agency (e.g. tax offices, operating separately from the company register)?

    If Partially or Yes: (Optional) Please briefly describe any requirements for firms to file structured data accounts or financial returns (e.g. is structured data filing voluntary or mandatory? Do exemptions exist for small firms?)

Part 2: What other requirements do the rules or guidance set out?

  • The rules/guidance require that data is regularly updated. (No, Partially, Yes)

  • The rules/guidance support publication of open data. (No, Partially, Yes)

  • The rules/guidance empower an agency or official to ensure the accurate and timely collection and publication of required data. (No, Partially, Yes)

Extent

  • How widely do these laws, regulations, policies or guidance apply?
    • They cover a limited number of localities or companies (e.g. only companies operating in a single sector or in a single sub-national jurisdiction/state).
      Supporting questions: Please briefly describe limits on coverage (e.g. which locality, type of company, or context for registration)
    • They cover, or are representative of those covering, many localities or companies
      Supporting questions: Please briefly describe limits on coverage (e.g. which locality, type of company, or context for registration)
    • They cover the majority of limited companies in the country
      Supporting questions: Please briefly describe limits on coverage (e.g. which locality, type of company, or context for registration)

Definitions and Identification

In most countries, limited liability companies must be registered, and must provide certain information either at the time of registration, or through periodic updates. This may include:

  • Company name, address and purpose
  • Details of directors and shareholders
  • Company accounts or financial reports

This information is often recorded in a company register, which may or may not provide public access to the information it contains. This indicator asks you to check for the laws, regulations, policies or guidance that govern the management of company registers, and look for evidence on whether or not they support collection and publication of structured data.

A note on company types

For the purpose of this indicator, focus on limited liability companies or equivalent. If there are multiple forms of limited liability company in this country operating under different frameworks, you should focus your assessment on the most common domestic form, as identified in the World Bank's Doing Business report.

If there are notable variations in the assessment you would make for other common forms of company, please briefly comment on this in the free text justification.

Either

  • (1) identify the most recent laws, policies or guidance, and perform keyword searches for data-related topics, and issues related to disclosure of collected data, in these document; and/or
  • (2) investigate the registration process for forming a company to understand whether this involves collection of structured data; and/or
  • (3) consult with experts to ask whether law, regulations, policy or guidance support collection and publication of structured data.

Starting points

  • Sources:
  • Search:
    • For recent updates to company registration laws in the country.
    • The website of the company registration agency for details of how they collect and manage data, and the basis of this in law or regulation.
    • For examples of current forms used to register a company.
  • Consult:
    • People who have recently formed a company may be able to describe the process
    • Company registration agents

National and sub-national considerations

In some countries company registration is a sub-national responsibility, carried out by individual states, regions or cities.

To achieve the highest scores on this indicator, there should be a framework that will support access to data about all companies in a country. This might be achieved by:

  • Having a minimum set of practices and standards that lead to data collection across all sub-national units; and
  • A framework that provides for aggregation of data from different sub-national units into a national database.

To assess countries where company registration is organised sub-nationally, researchers should select the strongest example of sub-national practice, and then indicate whether this is an outlier, or an example of widespread practice.

Company registration data, and company identifiers in particular, are used in a wide range of contexts, including:

  • Supporting anti-corruption and anti-money laundering investigations;
  • Enabling business intelligence and corporate due diligence;
  • Facilitating business processes and data management;
  • Supporting cross-border and wealth taxation;
  • Generating economic statistics and supporting economic policy making;
  • Analysing social, environmental and equity issues across the economy; and
  • Improving consumer choice.

To develop this indicator we have considered both international agreements on company registration, and user needs for corporate data. We draw in particular on interpretive notes of FATF Recommendation 24 which state that “All companies created in a country should be registered in a company registry” and that registration should include a “company name, proof of incorporation, legal form and status, the address of the registered office, basic regulating powers (e.g. memorandum & articles of association), [and] a list of directors” and that there should be mechanisms to keep this basic information up to date (FATF/OECD 2020, 91).

Continuity with the Open Data Barometer

The Open Data Barometer included indicator ODB.2013.D7 assessing the availability of Company Register data defined as: “A list of registered (limited liability) companies in the country including name, unique identifier and additional information such as address, registered activities. The data in this category does not need to include detailed financial data such as balance sheet etc.”

The proposed company register availability indicator in the GDB should be broadly comparable with this.

A short history of corporate ownership transparency

The modern corporate form developed from royal charters issued to colonial trading companies in the 17th Century, establishing ‘legal persons’ independent of their ‘natural person’ shareholders or members (Williston 1888). From the mid 1800s, the concept of limited liability was introduced (Blumberg 1985), and the creation of corporations became a matter of registration rather than royal charter. With the exception of firms owned through bearer shares, corporate registration has long been a transaction involving declaration of the ‘natural persons’ who own, or bear responsibility for, the corporate entity.

Tabatabai Hesari and Safizade (2020) describe an evolution of company registration through three phases, from early ‘administrative systems’ that focussed on allowing founders to obtain a certificate of corporate registration in return for providing some basic information, through a ‘supportive system’ emerging after the economic crisis of the 1930s in which registers sought to also collect financial-economic information in order to reduce information asymmetries between internal and external stakeholders of a company, to a more recent ‘inexpensive systems’ phase in which the emphasis is placed on streamlining company formation and functioning (Tabatabai Hesari and Safizade 2020). Whilst some countries may have only a few forms of corporate registration and corporate registers associated with them, in others there are many forms of corporate entity and registration practices applying to different forms of corporation or association, from private limited firms, to partnerships, mutual societies, financial institutions and listed companies. Responsibility for company registration may belong to national registrars, handled through national gazettes, delegated to business associations and Chambers of Commerce, or to commercial franchise holders operating the registry. Listed companies in particular are subject to the disclosure requirements of the stock exchange on which they are listed, which can have substantial variations, particularly with respect to the information available on shareholders.

The distributed and fragmented nature of corporate registration both within and across countries has meant that, whilst trade and financial flows have globalised, information on firms has remained surprisingly siloed. The Global Legal Entity Identifier Foundation maintain a list of over 700 business registers around the world. A number of notable efforts to address this fragmented landscape include: the creation of proprietary company information products, such as Dun and Bradstreet’s company information products used particularly in corporate due diligence and supply chain management; the work of OpenCorporates in ‘scraping’ existing company registers and publishing them as open data; and the creation of the global Legal Entity Identifier (LEI) at the request of the Financial Stability Board to support identification of entities involved in financial markets. However, it remains unclear how far interested parties have effective access to structured and open data on firms across the world, and it is this that the Barometer seeks to address.

There have been sustained civil society campaigns for greater openness of company records, particularly in the European Union, where work by Access Info in 2016 revealed the challenges of accessing company data (Quintanilla and Darbishire 2016). In 2019, the EU Open Data Directive included “Companies and company ownership” as one of six data categories “having a particular high value for the economy and society”, although campaigners have expressed concern that implementation of this commitment is lagging, in part because governments are reluctant to challenge current funding model of registers that charge for access to data (Domínguez 2021). This highlights the dynamic nature of a settlement on how open company data will be, and the need for active monitoring over coming years.

A note on central and federated registers

Whilst many countries operate corporate registration at a sub-national level, it is increasingly common to find systems that aggregate or search across sub-national registers. For example, Colombia and Germany both have comprehensive portals to access information from local registrars, and Canada has a beta service covering seven of Canada’s provinces and territories. A notable exception at present is the United States, although third parties have been able to aggregate data from the majority of States. Given many user needs for data are better served when data is available in an aggregated and standardised form at the national level, we propose to allow that countries with either national registers, or national aggregation platforms, score higher than those with only sub-national siloed registers.