96576
June 2007
Europe and Central Asia, Finance and Private Sector Development Department
In collaboration with the Information and Technology Policy Division
The World Bank
Implementing Electronic Business Registry (e-BR) Services
Recommendations for policy makers based on the experience of EU
Accession Countries
Anat Lewin
Leora Klapper
Bruno Lanvin
David Satola
Sophie Sirtaine
Richard Symonds
1
Table of Contents
Executive Summary ............................................................................................................ 5
Introduction ......................................................................................................................... 7
What Does e-BR Reform Entail? .................................................................................. 7
E-BR Reform in the EU New Member States .............................................................. 8
Types of e-BRs ........................................................................................................... 10
1. The Role of e-BRs in Private Sector Development .................................................... 11
Electronic Business Registration around the World ................................................... 11
2. Benefits of “Good Practice” e-BR Services................................................................ 17
3. Good Practice e-BR Products and Services ................................................................ 20
4. Other Aspects of Good Practice e-BR Reform ........................................................... 24
5. Key Legal Aspects of Establishing, Maintaining and Using e-BRs ........................... 25
Overview of Legal Issues............................................................................................ 25
Objectives of Legal e-BR Reforms ............................................................................. 27
Key Legal e-BR Issues................................................................................................ 28
6. Good Practice Public-Private Partnerships for e-BRs ................................................ 29
Good Practice Examples of PPPs in e-BR Implementation........................................ 29
Legal Aspects of Public-Private Partnerships (PPPs) ................................................. 30
Important Considerations for the PPP Contract .......................................................... 36
7. Monitoring and Evaluation of e-BRs .......................................................................... 37
8. Integrating e-BRs into National e-government Frameworks ...................................... 38
E-Government as a Tool for Public Sector Reform .................................................... 38
Benefits of e-BRs as a Component of e-government Strategies ................................. 39
Good Practices .............................................................Error! Bookmark not defined.
Important Institutional Considerations for e-BRs and e-government Dynamics........ 40
The e-Enabling Environment ...................................................................................... 42
Conclusion: Recommendations .................................................................................. 43
Annex 1: Legal Aspects of Establishing, Implementing and Using e-BRs ...................... 44
The Legal Authorization Framework for Business Registries in the EU ................... 44
The Legal Enabling Environment ............................................................................... 47
Annex 2 - Legal Checklist ................................................................................................ 51
Annex 3 – Survey summary.............................................................................................. 52
Acronyms .......................................................................................................................... 56
References ......................................................................................................................... 57
2
List of Figures
Figure 1: Phases of Business Registry Automation ............................................................ 7
Figure 2: Electronic Business Registration, by Region, 2007 .......................................... 12
Figure 3: E-registration Requirements, 2007 .................................................................... 13
Figure 4: E-Registration and the Investment Climate, 2007............................................. 13
Figure 5: E-Registration and Entry Rates, 2007 ............................................................... 14
Figure 6: Number of New Businesses Incorporated ......................................................... 15
Figure 7: Use of Web-based and Paper-based Registries in Denmark and in Italy .......... 20
Figure 8: e-BR Legal Issues Map ..................................................................................... 26
Figure 9: The Legal Framework Design is Dynamic........................................................ 27
Figure 10: Distinguishing Characteristics of Common PPP Models ................................ 32
Figure 11: Framework for ICT in Government ................................................................ 38
Figure 12: Interoperability of e-government Services ...................................................... 40
List of Boxes
Box 1: The BRITE Project ................................................................................................ 10
Box 2: The Case of Guatemala ......................................................................................... 16
List of Tables
Table 1: Potential Users of an E-BR ................................................................................. 17
Table 2: Availability of Good Practice e-BR Products and Services ............................... 21
Table 3: Sample e-BR Monitoring and Evaluation Indicators.......................................... 37
3
Acknowledgements
This report was prepared by a multi-disciplinary team from the World Bank’s Eastern
Europe and Central Asia, Global Information and Communication Technologies,
Development Economics Research, and Legal departments. It was led by Sophie Sirtaine
(ECSPF, Senior Financial Sector Specialist) and its main authors are Anat Lewin
(CITPO, Operations Analyst), Sophie Sirtaine (ECSPF, Senior Financial Sector
Specialist), David Satola (LEGPS, Senior Counsel), Richard Symonds (LEGPS, Senior
Counsel), Leora Klapper (DECRG, Senior Economist), and Bruno Lanvin (CITPO,
Advisor).
The authors would like to thank Cara Zappala (ECSPF, Operations Analyst), Serah
Kimane (LEGPS, Intern) and Laci Barrow (CITPO, Program Assistant) for their research
and written contributions. The comments provided by the following peer reviewers were
particularly helpful and highly appreciated: Randeep Sudan (CITPO, Senior ICT Policy
Specialist), Jacqueline Coolidge (CICFI, Lead Investment Policy Officer), and Anjali
Kumar (FPDFA, Advisor).
4
Executive Summary
This paper shares experiences and good practices of early business registry reformers
who transformed a formerly paper-based business registry into a nationally centralized,
one-stop, automated, web-enabled electronic business registry (e-BR) that delivers
products and services via online transactions and authentication of users and documents.
On the basis of country data, the paper discusses the role of e-BRs in Private Sector
Development and concludes that countries with e-registries tend to have a shorter
incorporation timeframes, fewer bureaucratic procedures, and a markedly lower cost of
entry. The data also reveal a significant role of modernized business registries in
facilitating business creation.
The paper then turns to the benefits of good practice e-BRs (i.e. a one-stop shop for
services of interest to business registry users, enabling them to submit requests for
services online, perform transactions online, and receive delivery of services online).
Country experience illustrates that a good practice e-BR offers users improved
efficiencies, by (i) reducing transaction time, (ii) providing transparency of information,
(iii) providing “real time” access to information updates, (iv) streamlining transaction
processes, (v) improving service availability, (vi) removing hurdles associated with in-
person visits, (vii) providing a user-friendly interface, (viii) improving data accuracy, (ix)
improving transaction security, (x) reducing costs and improving efficiencies for private
businesses through the online submission of data, (xi) decreasing the public-sector cost of
maintaining registries, and (xii) providing a better tool for market surveillance and
business monitoring. Good practice e-BRs also provide the private sector with
competitive data services, which are of particular interest to users such as credit rating
agents, loan officers and business partners.
The paper then underlines the need to ensure a proper legal enabling environment, a
necessary ingredient to produce legal and transactional certainty and transparency to
encourage use of the e-BR. The paper proposes a holistic framework to constructing the
legal enabling environment for the maintenance, operation and use of e-BRs, in which
legal functionalities are defined along with technical and business process issues. The
paper suggests that many legal issues need to be addressed to ensure a successful e-BR,
including, inter alia, assigning adequate powers to the e-BR, choosing the nature and
scope -- transparency -- of information to be provided by the registry, defining the degree
of privacy and treatment of non-public information retained by the registry, determining
how to avoid multiple filings by firms, ensuring the legal validity of electronic documents
and electronic signatures, defining the rules of dispatch and receipt of data through the e-
BR, ensuring data integrity and protect the data base, including from cyber-crime
The paper further suggests that contracting the private sector to create or operate some or
all e-BR services through Public Private Partnerships (PPPs) leads to several benefits,
including (i) reduced costs, (ii) improved efficiency, (iii) improved quality of public
services, and (iv) transferring risks away from the public sector. It suggests that several
5
key issues are particularly sensitive to the project’s success and need to be addressed in
the PPP design, including: fees for transactions, profit sharing agreement with the private
partner, ownership of the data, intellectual property rights, security and privacy issues,
public sector oversight, competition of PPP arrangements, and consultation with
stakeholders.
Finally, the paper recommends that business registry reform, both procedural and
technical, should be an integral part of the national e-government strategy. E-government
is about bringing better and cheaper government services to citizens, businesses and other
government agencies. Available evidence shows that the countries most successful at
implementing e-government services are those that focused on reforming their public
sector rather than on automating existing procedures. Business registries are considered a
priority area for governments in the process of designing and implementing an e-
government vision, policy and strategy, as they are cross-cutting in scope and support a
broad array of applications relevant to a range of stakeholders. In particular, the
interoperability of business registries with the pledge and land registries can offer a one-
stop-shop for loan applications by businesses, while their interoperability with other
registries many facilitate other services useful to businesses (e.g. fiscal exemptions, staff
search, etc).
6
Introduction
The objective of this paper is to share the experiences and good practices of early
business registry reformers who implemented web-enabled and automated electronic
business registries (e-BRs). These lessons are hoped to be of help to EU New Member
countries as they embark on delivering EU-conformant e-BRs. At the same time,
policymakers in other developing countries may also find these lessons of use.
This paper cites examples of “good practices” rather than “best” practices. As elsewhere
in the development agenda, solutions that have worked well in some countries may not
work in other local circumstances. In the case of e-BRs, success depends on a broader set
of reforms; as will be discussed in a subsequent chapter, e-BRs require a supportive legal
and regulatory infrastructure, such as electronic signature laws and document
authentication. A needs assessment and analysis of the options in the local country
context need to be conducted in order to find the most relevant best practice options for a
specific country. Nevertheless, a number of practical good practices can be identified and
are presented in this paper for consideration.
What Does e-BR Reform Entail?
This paper refers to ‘e-BR reform’ as the process by which a formerly paper-based
business registry evolves to a nationally centralized one-stop, automated, web-enabled
platform delivering products and services via online transactions and authentication of
users and documents. Phases 1 – 3 of an e-BR reform process are illustrated in Figure 1
below – centralization, automation and authentication. Ideally, but in practice less
prevalent, e-BR reform extends also to the integration of the e-BR platform with those of
other governmental services, such as e-government services of the taxation authority,
citizen registry, land and pledge registries, and trade databases. Integration and
interoperability in this sense means the ability of a user to transact (e.g. view, download,
upload information) concurrently with multiple registries from a “one stop shop” and
single window. Such integration of related e-government services, the benefits of which
are discussed later in this paper, refers to Stage 4 of Figure 1 below.
1. Centralization
1. Centralization 2. Automation
2. Automation 3. Authentication
3. Authentication 4.
4. Integration
Integration
… some … some are … some are
Some automated but
may be fully
countries need to
automated
centralized implement
need to better and need to
centralize but paper- authentication integrate e-
based, and to remove last Gov services
the front- in-person
end need to visits or paper and
automate requirements regionally
7
Having outlined what e-BR reform entails, it is important to point out also what it does
not include. The e-BR reform discussed in this paper does not refer to the automation or
web-enabling of ineffective or inefficient processes. Such reforms are important and
discussed at length in the literature1, but are beyond the scope of this paper.
E-BR reform involves addressing any existing hostile legal, institutional or regulatory
environment to business registry success. In Chapter 5 of this paper, the legal,
institutional and regulatory environment conducive to e-BR success will be analyzed.
This paper presents its discussion on good practice implementation of e-BRs by
discussing (1) the role of e-BRs in Private Sector Development; (2) the benefits of good
practice e-BRs; (3) good practice online applications and services; (3) creating a well-
functioning legal and regulatory framework for electronic documents and signatures; (4)
creating Public-Private Partnership (PPPs) for implementation; (5) integrating
government databases and service provision for interoperability; and (6) anchoring
electronic registries in national e-government frameworks.
E-BR Reform in the EU New Member States2
The First Council Directive published by the EU on March 9, 19683 mandated in its
Article 3 the requirements for companies to file specific corporate and financial
information, by electronic means, to a central commercial or company register. When the
new member countries joined the EU, they were given a deadline of January 1, 2007 to
meet the requirements set in the First Council Directive.
Despite this deadline, progress in meeting the requirements set in the First Council
Directive has been unequal among the EU8 countries. While some, such as Latvia and
Estonia, have among the most advanced and best performing business registries in
Europe, others, such as Poland, are still working to a large extent with paper-based
decentralized registries in municipal courts, and working towards meeting the EU
requirements past deadline.
So as to best capture the current status of electronic business registries in Europe, a short
survey was distributed to agencies responsible for registry management. Responses were
received from 10 countries, namely Estonia, Hungary, Ireland, Latvia, Lithuania,
Norway, Romania, Slovakia, Slovenia, and the United Kingdom (see detailed in Annex
3). It is clear from the responses that there are varying levels of sophistication among
these countries in terms of the on-line services offered.
1
A comprehensive publication on reforming business registries is IFC, Reforming Business Registration
Regulatory Procedures at the National Level: A Reform Toolkit for Project Teams, February 2006
2
Note that the “EU New Member States” referred to in this paper are the Eastern European countries that
joined the EU since 2000 (i.e. Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland,
Romania, Slovakia and Slovenia). It does not refer to countries that joined the EU after 2000 from other
regions of Europe, such as Malta and Cyprus.
3
First Council Directive - 68/151/EEC of 9 March 1968, as amended.
8
In terms of basic capabilities, the survey asked whether it was possible for new firms to
register entirely on-line. Five countries responded that they presently have this capacity:
Estonia, Hungary, Norway, Romania, and the United Kingdom. Slovakia is expected to
offer this service beginning on August 1, 2007, while Slovenia will begin on November
11, 2007. The remaining countries (Ireland, Latvia, and Lithuania) do not currently offer
such service. Several other countries which did not answer the survey do not offer on-line
company registration either. (See Table 2).
Within those countries offering electronic registration, firms can now enjoy shorter
registration processing times as part of the regular service standard and even shorter
times with expedited service. For instance, in the case of Estonia, prior to implementation
of the electronic service, the standard processing time was five days. Since
implementation of the on-line registry, the service standard for completing a registration
was reduced to 2-3 days; and with expedited service it takes just 2 hours. Norway can
claim even greater efficiency gains. Prior to implementation of the on-line registry, it
would take 5 days to complete the process. Presently the service standard is 1 day, with
expedited service completed in 1 hour.
It is interesting to note that with regard to cost, most countries responded that there are
either little or no transaction fees to use the on-line registry.
Beyond the basic electronic business registry capabilities of the countries surveyed, a few
countries’ systems offer several advanced features. For instance, in Estonia and Norway,
systems are interoperable and interlinked with six other agency systems, namely e-
procurement system for government agencies, and the land, labor, tax, pledges and
citizen’s registries. Slovenia’s system is also interoperable with six systems: land, labor,
tax, pledges and citizen’s registries and the trade database. Among those which
responded to the survey, countries showing the lowest degree of interoperability with
other registries and databases include the Slovak Republic (with only two partial links)
and The United Kingdom, Ireland, Romania (with no link capabilities). Several of the
countries which did not respond to the survey do not offer much interoperability either.
This having been said, all 10 respondents confirmed that their electronic business
registries are part of the countries’ official e-government vision and framework.
Thus, while lessons can be learned from the experience of some EU new member states
with advanced e-BR processes and services, others would benefit from further reforms of
their business registries. It is likely that reforms accelerate in Europe, in part under the
impetus of the EU requirement mentioned above, and of further work by the EU, such as
the BRITE project to connect EU-wide e-BRs online, through a common platform that
enables information searches on firms across countries (see below). The paper now looks
at how best to implement such business registry reforms.
9
With the goal of establishing a dynamic business ecosystem, the European Union, in conjunction with the
European Business Registry, has launched the “Business Register Interoperability throughout Europe”
(BRITE) project in 2006.
BRITE aims to address the cross-border registration problem within the EU and facilitate greater private
and public sector access to data by creating a common and unified European Business Registry that
harmonizes the collection and distribution of business registry data.
Its main challenge is the interoperability among national-level EU registries. A common ontology for each
of the EU business registries, as well as linkage existing and equivalent data fields, are part of the solution.
An additional goal is to promote registry data as part of greater e-government initiatives.
Source: http://www.briteproject.net
Types of e-BRs
Business registry officials moving from a paper-based business registry towards a full-
fledged e-BR need to think about the type of e-BR or reform process best suited to their
context. This involves finding answers to the following questions:
1. Should reforms be phased into steps (see Figure 1) or should the
implementation leapfrog from Phase 1 to Phase 3 or 4? An example of a
country that successfully sustained the IT skills challenges of leapfrogging is
India.
2. Should a multiple utility registry be set up? For smaller countries such as
Rwanda, a one-stop-shop and single window registry for various e-
government services makes good sense, and it is in the process of designing
3. If the Business Registry is currently run out of the courts system, should a
centralized e-BR be moved to a central agency? The answer depends on the
overall, larger administrative reform that accompanies the introduction of the
e-BR. Germany, for example, has retained business registry operations in
local courts, therefore its business registry IT solutions have found ways to
collect data from disparate geographical locations. Other countries, such as
Serbia, unified the registry under a new independent administrative agency.
Three Serbian organizations with different mandates – 13 commercial courts,
131 municipalities and the statistical office administered business registries
before.4 It now, similar to Bulgaria, has avoided delays by creating a new
administrative registry.5
4
Jacobs and Associates, Reforming Business Registration in Serbia, August 2002
5
The Doing Business Report 2007 states that business registration takes 20 days more on average where
judges are involved.
10
1. The Role of e-BRs in Private Sector Development
Entrepreneurship is essential for the continued dynamism of the modern market
economy; a greater entry rate of new businesses can foster competition and economic
growth.6 Many governments have taken action to make it easier for entrepreneurs to start
a new firm, such as deregulating the registration process and automating the business
registry, which can reduce time and cost for entrepreneurs.7 These steps have been shown
in countries around the world to increase entry and small business employment.8 In this
chapter we focus on electronic business registration as a mechanism to promote private
sector development and growth.
The introduction of electronic registration systems is a high priority and a challenge to
many of the new and accession EU countries. In these countries, the small and medium
sized enterprise (SME) sector comprises relatively young, highly leveraged, profitable
and fast growing firms.9 This suggests that a new type of firm is emerging in transition
economies, a firm that is more market- and profit-oriented. One way the governments of
Central and Eastern Europe can encourage the growth of SMEs is to facilitate and reduce
the time and cost of registration process by allowing on-line registration. In addition, a
larger number of formally registered firms is associated with a smaller informal sector,
which are associated with slower growth and employment and lower tax revenue.10
Furthermore, formal sector registration provides firms access to a VAT sales ID, which
offer greater domestic and international sales opportunities. Automating the registration
process also helps provide lenders, suppliers, and customers greater access to information
on the financial health, management, and ownership of registered firms, which
encourages greater access to financing and growth.
Electronic Business Registration around the World
This first section provides a review of the different typologies of business registries
around the world as shown in the World Bank Group Entrepreneurship database.11
Seventy-five countries participated in the survey populating this database, providing
valuable information about their registration processes, information requirements, and the
availability of e-registries and e-distribution, among other issues.12 While these survey
results are global in nature, greater detail on business registries in the new and accession
EU countries in particular is provided in Chapter 3.
6
For example, Klapper, Laeven, and Rajan, 2007; Hause and Du Rietz, 1984; Black and Strahan, 2002.
7
For cross-country data on the cost, time, and number of procedures required to register a business, see
Djankov, La Porta , Lopez de Silanes and Shleifer, 2002 or www.doingbusiness.org.
8
See Seira, Kaplan, and Piedra, 2007 and Yakovlev, E, E. Zhuravskaya, 2007, for studies on the effect of
registration reform on entrepreneurship in Mexico and Russia, respectively.
9
See Klapper, Sarria-Allende, and Sulla, 2002 for a complete review of the SME sector in ECA countries.
10
For example, see Djankov, La Porta , Lopez de Silanes and Shleifer, 2002.
11
The complete database is available at: www. ifc.org/ifcext/sme.nsf/Content/Resources.
12
For a complete description of the survey and entrepreneurship rates, see Klapper, Amit, Guillén, and
Manuel Quesada (2007).
11
a) Business Registry Typology
In order to asses the different degrees of modernization of business registries, the survey
collected information on the availability of electronic registration, which broadly includes
the automation and computerization of local registrars, the ability to register over the
Internet, and electronic distribution of data via the Internet. However, this does not
necessarily include on-line authentication or integration of e-government services. Figure
2 shows the deep disparity found between industrialized and developing countries. While
on average only 40% of developing countries have implemented an electronic registry,
more than 80% of the industrialized countries have already achieved complete
automation. With the exception of emerging economies in Eastern Europe – which are
working to meet EU requirements for electronic and harmonized business registries –
only 35% of developing countries have electronic registries. However, in most regions
over 60% of countries make registrar information available over the internet. This
discrepancy might be explained by the fact that electronic distribution is less expensive
and difficult to implement, not requiring the implantation of electronic signatures or
complex e-government platforms.
Countries with e-registration Countries with e-distribution
100%
14/16
13/16 16/20
80% 52/75
7/11
6/11 10/17
60%
32/75
4/11 9/17
40% 6/20 3/11
20%
0%
Industrial Europe and Latin America Africa and Asia TOTAL
countries Central Asia and the Middle East
Caribbean
Source: World Bank Group Entrepreneurship Database
The registries were also questioned on the information businesses were required to file, as
well as whether they registered information other than business incorporations. Deep
disparities among regions were found (Figure 3). When it comes to the information the
companies are required to register, the majority of regions oblige businesses to report
closures and annual financial statements (with the exception of Asia). Nevertheless, while
many countries have this requirement, not all of them have any enforcement
mechanisms.13 In addition, while business registries in industrialized countries tend to
stand alone, and only in some cases they register internet domains, developing countries
13
Although most registrars remove firms that have not submitted annual filings for four years, some
countries are becoming more proactive to ensure that only active firms are included. For instance, Denmark
is the first registrar that confirms annually that registered firms are also filing with the tax authority.
12
tend to have registries where businesses, real state, Internet domains and patent
registrations coexist. These results suggest that countries introducing platforms for
electronic business registration should also consider the demands for and potential to
provide other electronic services, and the possibility to employ interoperable, one-
window platforms.
Africa and Middle East Europe and Central Asia
Latin America and the Caribbean Asia
Industrialized countries
100%
80%
60%
40%
20%
0%
Required to file Required to report Real Estate Internet domain Patents
annual financial firms closures registration names Registration
statements Registration
Source: World Bank Group Entrepreneurship Database
b) Impact of Electronic Registry in the Ease of Doing Business
Ultimately, we are interested in how business registry reform impacts entrepreneurship
and the ease of doing business. We find that countries with e-registries tend to have a
shorter incorporation timeframe, fewer bureaucratic procedures, and a significantly lower
cost of entry. For instance, the average cost of entry is on average less than half in
countries with electronic registries than in countries without electronic registration, as
shown in Figure 4.
Countries with e-registration Countries with out e-registration
47.8
50 41
40 32 28.9
30
20 10
7.7
10
0
Average Duration in days Average Number of Average cost of entry
Procedures
Source: World Bank Group Entrepreneurship Database and Doing Business (2006 data)
13
c) Impact of Electronic Registration on Entry Rates
The data also reveal a significant role of modernized business registries in facilitating
business creation. Figure 5 shows higher entry rates – defined as the number of new
registrations divided by the stock of existing registrations – in those countries with
electronic registries compared to the ones without them. Although we have no evidence
that these firms that register following business modernization reform are more or less
likely to survive and contribute to job creation and growth, we do know that greater
private sector entry provides competition to existing firms, which encourages innovation,
greater added value, etc. This relation is strongest in developed and ECA countries.
However, we cannot dismiss reverse causality; that registry modernization is demand-
driven by a more robust private sector. Furthermore, the increase in new business
registrations may be a short-lived phenomenon, i.e. the largest increase in new firms
might occur in period immediately following reforms.14
With electronic registration Without electronic registration
12%
10%
8%
6%
4%
2%
0%
Africa and Middle East Asia Europe and Central Latin America and the Industrialized
Asia Caribbean Countries
Source: World Bank Group Entrepreneurship Database. Entry rates are for 2005.
Note: the above numbers may be inflated by closed firms.
d) Impact of Private Sector Modernization and Electronic
Registration: Guatemala, Sri Lanka and Jordan
The modernization of business registries is an important step in a successful private
sector development strategy. If appropriate political and economic reforms take place, the
country will require an efficient registry that can satisfy new businesses demands.
Otherwise, the registry will become a bottleneck for entrepreneurs, not only encumbering
14
See Seira, Kaplan, and Piedra, 2007 for evidence that the impact of registration reform in Mexico was
concentrated in the first 10 months after implementation.
14
the business creation process, but also discouraging the transition between the informal
and formal sectors.
The modernization process of business registries is usually a long process framed inside a
larger national private sector development strategy. On average, countries draft five-year
plans and the goal is to implement electronic registration and distribution. Data from the
World Bank Group Entrepreneurship database suggest a strong relationship between the
implementation of a modern business registries and a significant increase in the number
of new business registered. Figure 6 shows the timeline of new business registrations for
three countries – Guatemala, Sri Lanka, and Jordan – that have successfully implemented
a business registry modernization strategy.
Guatemala Sri Lanka Jordan Year of implementation of e-BR
40000 9000
35000 8000
30000 7000
6000
25000
5000
20000
4000
15000
3000
10000 2000
5000 1000
0 0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
All three countries witnessed an increase larger than 20% in the number of new business
registration after the full implementation of their modernization plans. It is also
noteworthy that in Jordan and Guatemala, the growth of new firms begins before the
implementation of the reform, usually about 4 years earlier when the modernization plan
was announced and initiated.
For example, Guatemala began its modernization plan in 1996, achieving e-registration
and e-distribution in 1999. Jordan, following a 1997 law, created a new entity in charge
of business registration and entrepreneurship promotion that fully implemented the
electronic registration in 2002. Sri Lanka, on the other hand, partially implemented its
electronic business registration in 2001, in order to prepare for the new Companies Act of
2007.
15
Since the creation of the business registry of Guatemala in 1971, its structure remained almost unchanged
for two decades. An average of seven employees and a couple of mechanical typewriters composed its
organizational structure until 1995. In 1996, under a new administration, the Business Registry undertook
an ambitious modernization plan. The initial program, divided into four phases, would be accomplished
with the implementation of e-registry and e-distribution in 1999.
40000
EBR implementation
35000
30000
25000
20000
Active Modernization plan
15000
Inactive Modernization plan
10000 plan
5000
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
The plan included not only the modernization of the business registry, but also the entrustment of the
registry as the central actor for the new private sector development strategy. The registry would gain an
active role in the promotion of entrepreneurship through activities such as training of entrepreneurs,
investment promotion, dissemination, etc. As shown in the Figure above, the modernization of the business
registry and the new economic policies had a direct impact in the number of new business registered, with
an increase of 40% on new registrations. In comparison, the three years period (2000-2003) during which
the modernization strategy was paralyzed due to a change in the administration, resulted in a sharp 11%
decline in the number of new business registered.
In 2003, the new administration reactivated the second modernization plan for the business registry. A
number of new and ambitious goals were defined, such as increasing the number of registration locations,
reducing the necessary steps for business incorporation, and promoting foreign investment. This second
stage had a remarkable impact in the number of new business incorporated, and increased the number of
new business registered per year by almost 25%. Moreover, the number of monthly electronic transactions
– including incorporations, closures, re-registrations and consultations - has climbed over 3400,
representing more than 50% of the total number of monthly transactions.
16
2. Benefits of “Good Practice” e-BR Services
A ‘Good Practice’ e-BR provides a one-stop shop for services of interest to business
registry users, enabling them to submit requests for information or services online,
perform transactions such as updating information or paying fees for information delivery
online, and receive delivery of services online.
Potential users of e-BRs and examples of the services they would pay for are summarized
in the table below:
Potential Users of an e-BR Potential use of e-BR services:
A business owner … … registers a new business or lists the board of
directors of a firm.
A loan approval officer at a financial institution … … confirms the financial health and history of a
potential borrowing firm and owners.15
A potential business partner … … confirms the details of a potential business
partner, such as who in the company is legally
entrusted with signing agreements.
A potential customer … ... confirms historical information on the operations
and management of the firms.
A potential supplier … … confirms the financial health of a potential buyer
in making trade credit decisions.
A lawyer or notary … … validates information.
A government official (e.g. a tax, customs, pension, … verifies a company’s active business status.
VAT or social security authority official))
The benefits of using an e-BR versus an in-office or paper-based service are those
relevant also to e-government services in general. A properly functioning, good practice
e-BR offers service providers and users improved efficiencies, by:
1. Reducing transaction time, often from several days or weeks with an in-paper
format, to just a few hours in the online version for such transactions as
registering or de-registering a company or changing the board of directors of a
firm.
2. Providing equal transparency of information to all who care to obtain a login
and password, and pay for the service if needed. To be noted here is that e-BRs
require web skills, Internet literacy, general language literacy, a PC and a
reasonable Internet connection. While most of these constraints are not
problematic in EU Accession Countries, an e-BR reform should be accompanied
with a push for rural access to the e-services, perhaps through local governments,
15
Access to registrar information is even more important in countries where non-banks are denied access to
credit information bureaus. For instance, historical information on the firm and owners is important for
leasing, factoring, and other financial decisions.
17
family- or student-focused PC campaigns, or rural telecenters, as well as Internet
literacy.
3. Providing immediate and simultaneous “real time” access to information
updates at the time of uploading, in contrast with waiting for a new paper-based
registry entry to be released.
4. Streamlining transaction processes such that services previously needing
several steps (perhaps at different physical locations) can be conducted in one step
online.
5. Improving service availability (24 hours a day, 7 days a week online, versus 9 to
5, on 5 days a week for most registries requiring in-person visits).
6. Removing hurdles associated with in-person visits, such as long lines, and traffic
jams.
7. Providing a consistently user-friendly interface online versus possibly
inconsistent quality of service during an in-person visit.
8. Improving data accuracy, by minimizing paper-based manual data entries, and
allowing the validation of data. For example, in South Africa, a recent
introduction of a new online annual reporting and submission requirement at the
Company Registry has led to a dramatic increase in the number of company de-
registrations and therefore improved the accuracy of overall corporate sector data.
In addition, the time needed to correct potential errors is reduced substantially. 16
9. Improving transaction security, if the system enables, as in Italy, the automatic
verification of identities and roles, and of signatures.
10. Reducing costs and improving efficiencies for private businesses through the
possibility for online submission of data, especially in the case of submission of
annual accounts data. For instance, InfoCamere, the Italian e-BR, estimated that
the filing of 850,000 annual accounts electronically saved Euro360 millions to
Italian SMEs in 2005. In Romania, in consideration of the expected reduced costs
of providing services, the business registry fees were cut by 50%.17
11. Decreasing the public-sector cost of maintaining registries, mainly by
decreasing the need and thus the cost of paper support and archiving, as well as
the amount and cost of administrative tasks (which enables a reduction in registry
staff).18
12. Providing a better tool for market surveillance and business monitoring by
making the easy aggregation of business registry data along sector, industry, or
geographic lines possible. Aggregated data in areas such as business entry, exit,
profits (where annual account data are provided) facilitate the analytical work,
investment decisions and policies of third parties as, for example, domestic credit
bureaus, rating agencies, foreign investors, economists and academics. One
example of this is Sweden’s UC, a computerized business and credit information
agency owned by banks. UC regularly collects data from over 20 sources,
16
For instance, the Chamber of Commerce of Bologna, Italy (which operates a local business registry with
about 80,000 registrations in 2005) estimates that the average time needed to correct entry errors was
reduced from 10 days to half a day after the registry was put online.
17
World Bank e-BR Questionnaire, Romania response, June 2007.
18
For instance, the Chamber of Commerce of Bologna estimates that the implementation of its online
business registry platform led to an annual cost savings of Euro343,000, resulting chiefly from staff cost
and space cost savings.
18
including the Swedish Companies Registration Office, into a large, web-enabled
database that offers credit monitoring and qualified financial analysis on all
enterprises registered in Sweden and all individuals over 16 years of age living in
Sweden.19
13. Providing the private sector with competitive data services. E-BRs can
become competitive to private sector data and analysis firms where they provide
value-added calculations and analysis of the e-BR data, such as in Latvia.20
19
For more information, please see http://www.uc.se.
20
In Latvia, the firm operating the e-BR, Lursoft, sells to private users data compilations and analysis
prepared on the basis of the registry data. See: www.lursoft.lv
19
3. Good Practice e-BR Products and Services
Examples of good practices in e-BRs registries that illustrate the benefits identified in the
section above abound.
In Portugal, for example, the e-BR called “FastTrack” allows users to select a pre-
approved name from the registry’s website, and proceed to the one-stop website to
register one’s company (the time for registering a new name out of the pre-approved list
being also quite short). The registry then automatically processes the taxation, social
security and labor registration, and publishes the incorporation notice. The articles of
association are standardized and there is no need for a notary. Within a year of providing
the FastTrack service, the number of companies registering using FastTrack rose from 12
to 75 a day.21
In Denmark and in Italy, the benefits of the business registry reforms implemented from
1993 to 2005 rapidly led to web-based overtaking paper-based transactions.22
Web Services Overtook Paper-based Services in Denmark 3.000.000 Italy
Percent
100 2.500.000
90
80
2.000.000
70 Paper-based offline
60 Web-based
1.500.000
electronic
50
1.000.000
40
30
500.000
20
10
0
0
2000 2001 2002 2003 2004 2005
2000 2001 2002 2003 2004 2005 (est.)
Good practice e-BR offer products and services of particular interest to users such as
credit rating agents, loan officers and business partners fall into two categories – basic e-
BR functionality, which mirror online processes of registry functions available also in the
paper-based format, and advanced e-BR functionality, which leverage off the online
nature of the e-BR to provide value-added services. Both are listed in Table 2 below, in
addition to the results of a recent questionnaire to business registry officials in Europe
illustrating who have already adopted the good practices.23
21
Doing Business Report, World Bank 2007
22
Danish Business Registry, Visit in September 2006; Italy business registry presentation by David
Mitzman, September 2006.
23
The countries that answered the questionnaire are: Estonia, Hungary, Ireland, Latvia, Lithuania, Norway,
Romania, Slovakia, Slovenia, and the United Kingdom.
20
Basic e-BR Functionality Countries That Answered Yes
Do you have an online, central Internet platform for your Estonia, Ireland, Latvia, Norway,
business registry, accessible via one Internet site? Romania, Slovakia, Slovenia, United
Kingdom
Do local business registries (such as regional business Estonia, Latvia, Lithuania, Norway,
registries or local courts) feed data electronically to the Romania, Slovakia
centralized online platform?
Can an entrepreneur register a new company entirely online? Estonia, Hungary, Norway,
24 25
Romania, Slovakia* , Slovenia ,
United Kingdom
Can one enter/change the firm’s name or address entirely Estonia, Hungary, Ireland, Norway,
online? Romania, Slovakia*, Slovenia**,
United Kingdom
Can one enter/change the names of the firm’s management or Estonia, Hungary, Ireland, Norway,
board entirely online? Romania, Slovakia*, United
Kingdom
Can one pledge property and capital entirely online? Hungary, Romania, Slovakia*,
Slovenia**
Are samples of the firm’s authorized signatures available Norway, Slovakia*,United Kingdom
online?
Does your online platform authenticate users? Estonia, Ireland, Latvia, Norway,
Romania, Slovakia*, Slovenia,
United Kingdom
Is national legislation in force for user authentication? Estonia, Ireland, Latvia, Lithuania,
Norway, Romania, Slovakia*,
Slovenia, United Kingdom
Is the e-BR authentication in compliance with relevant national Estonia, Ireland, Latvia, Norway,
legislation? Romania, Slovakia, Slovenia, United
Kingdom
Is this authentication method used also on other Internet sites, Estonia, Latvia, Lithuania, Norway,
for example on e-government services sites or commercial Slovakia*, Slovenia
banking sites?
Does your online platform have a legally valid electronic Estonia, Ireland, Latvia, Norway,
signature capability? Romania, Slovakia*, Slovenia
Are extractions from your online platform accepted as true and Estonia, Norway, Slovakia*,
correct copies under the law? Slovenia, United Kingdom
Other than transaction fees, are there any access restrictions Slovenia
placed on potential registry users such as credit
information/rating agencies, commercial banks?
Can registry data be purchased or downloaded in bulk? Estonia, Hungary, Ireland, Lithuania,
Norway, Romania, Slovakia,
Slovenia, United Kingdom
24
*This will be possible in Slovakia beginning on August 1, 2007.
25
**Registration for sole proprietors has been available since July 2005. Online registration for companies
will be available after November 11, 2007.
21
If the services of a notary are needed, can a notary log in to Estonia
sign a document associated with a firm, or perform a notarizing
transaction without needing in-person or in-paper steps?
If the services of an accountant are needed, can an accountant Norway, Slovenia
log in to sign a document associated with a firm, or perform an
accounting-related transaction without needing in-person or in-
paper steps?
Is a firm’s annual account data viewable online? Estonia, Ireland, Lithuania, Norway,
Romania, Slovenia, United Kingdom
Is all historical data available online? Estonia, Hungary, Latvia, Lithuania,
Slovakia
Was the majority or all historical data scanned in? Hungary, Norway, Slovakia,
Slovenia
Was the majority or all historical data entered manually? Estonia, Hungary, Latvia, Lithuania,
Romania
Did one or more private firms under a public-private partnership Latvia, Slovakia
(PPP) agreement implement the electronic business registry?
Did one or more private firm(s) develop the online platform? Hungary, Ireland, Latvia, Norway,
Romania, Slovakia, Slovenia
Does/do one or more private firm(s) manage/operate the online Hungary, Latvia, Norway
registry today?
Advanced e-BR functionality
Is information on a firm’s legal court-sanctioned bankruptcy Estonia, Hungary, Latvia, Norway,
available online through the e-BR (for example through Romania
automatic links with a relevant database)?
Is information on independent or registrar-issued credit ratings --
available online through the e-BR (for example through
automatic links with a relevant database)?
Is the e-BR part of the country’s official e-government vision Estonia, Hungary, Ireland, Latvia,
and framework, such as being included in the government’s e- Lithuania, Norway, Romania,
government Strategy or Policy? Slovakia, Slovenia, United Kingdom
Is the e-BR interoperable and interlinked with a credit-rating Lithuania, Norway, Slovenia
system?
Is the e-BR interoperable and interlinked with an e-procurement Estonia, Norway
system for government agencies?
Is the e-BR interoperable and interlinked with a land registry? Estonia, Latvia, Lithuania, Norway,
Slovenia
Is the e-BR interoperable and interlinked with a Pledges Estonia, Latvia, Norway, Slovenia
registry?
Is the e-BR interoperable and interlinked with a Trade Lithuania, Slovakia, Slovenia
database?
Is the e-BR interoperable and interlinked with a social security Estonia, Lithuania, Norway, Slovenia
or labor registry?
Is the e-BR interoperable and interlinked with a Tax registry or Estonia, Latvia, Lithuania, Norway,
database? Slovakia, Slovenia
22
Is the e-BR interoperable and interlinked with a citizens’ Estonia, Latvia, Lithuania, Norway,
registry? Slovenia
Does the e-BR offer automatic tracking of firms of interest Ireland, Latvia, Norway
(Favorites) to users?
Does the e-BR offer automatic news feeds about the firm being Hungary, Ireland, Latvia, Norway,
viewed? United Kingdom
Can firms enter or upload their annual accounts information Hungary, Lithuania, Norway, United
online directly into a field-by-field database? Kingdom
Are analysis and aggregation of annual accounts data (by --
industry, region, sector, profitability or for the entire country)
available through the e-BR site?
23
4. Other Aspects of Good Practice e-BR Reform
When implementing online applications and services, the following considerations are
important.
The accuracy of data can be improved through:
Manual entry or checking of scanned data when entering historical
information;
Verification by notaries or lawyers remains a necessity, but could be
simplified in workflows as much as possible;
Automatic population of online forms with existing data.
The timeliness of services can be improved through:
Provision of Help Desk Services during extended hours. The Danish
customer information center, for example, is staffed by 100 people.26
Removal of any in-person steps for transactions;
Removal of in-paper steps for transactions.
The institutional environment can be improved through:
Securing sufficient government budget for the reform during the planning
stage.
The BR workflows and processes need to be evaluated and if needed, reformed
through:
Gaining time efficiencies by reducing workflows to intermediaries where
needed. For example, some countries have found that business start-up takes
20 days more on average where judges approve business registration
applications. In response, Bosnia and Herzegovina, Romania and Slovakia left
registration in the courts but shifted responsibility from judges to legal clerks.
Italy and Honduras transferred registration from judges to private chambers of
commerce. Bulgaria and Serbia avoided delays by creating a new
administrative registry.27
26
Interview with Danish registry officials, September 2006
27
World Bank, Doing Business Report 2007
24
5. Key Legal Aspects of Establishing, Maintaining and
Using e-BRs
This chapter summarizes the key legal issues that need to be addressed when establishing,
maintaining and using an electronic business registry. Further details on each of the key
legal questions addressed in this chapter can be found in Appendix I.
Overview of Legal Issues
The establishment, operation and use of e-BRs raise a number of legal issues. Certain
aspects about e-BRs make them qualitatively different than their paper-based business
registry predecessors. The move from paper-based, analogue systems to on-line,
electronic systems is more than a migration from one medium to another. The electronic
format raises new and unique legal issues regarding e-BRs and how to use them.
In the establishment of the registry, the Member State will decide whether to operate the
e-BR itself or outsource some or all of its operation through a contractual or other legal
arrangement sometimes involving the private sector, or Public-Private Partnerships
(PPPs). These arrangements in turn involve public procurement issues. Once established,
each time a business makes a filing with the e-BR, legal issues are raised, such as how to
“authenticate” the supplier of the information as the party it purports to be; how to ensure
the integrity of information supplied to the e-BR; how the e-BR stores and manipulates
that data; how third parties access the data in the e-BR; the manner in which the registry
is protected as “critical infrastructure”; and how fraud, interference with data
transmission entries and hardware and software systems, and misuse of the E-BR are
punished. Some registries are cross-linked, cover more than one subject matter area, or
are linked (or should be linked) with other governmental automated systems. In that
sense, issues of interoperability – at the logical, technical, legal and content levels – are
important. Similarly, since the national e-BRs are part of a pan-European system, how the
EU Member States’ e-BRs interact with one another across borders also must be taken
into consideration.
25
e-BR Legal Issues Map
e-registry
Legal Issues Map
PPP Contract &
procurement issues
Government
X Border issues
CIP issues
Service Procurement issues
Provider
Data Subject Registry Data User
i er
nt
ro
lF
na
tio
•E-sign •CIP
Na
•Data accuracy/integrity •IPRs in data
•Cyber Crime
This chapter looks at the substantive legal requirements for business registries, including
e-BRs, (purpose, and institutional, content and form requirements, etc). The detailed
“electronic” legal issues affecting e-BRs (authentication of users, legal validity of
electronic documents and signatures, ensuring data privacy and integrity, intellectual
property rights, critical infrastructure protection, and cybercrime) are discussed in
Appendix 1.The legal issues – such as liability - affecting the use of PPPs in connection
with e-BRs are discussed separately in the next chapter on PPPs. It should be emphasized
that this overview is not prescriptive and is not intended to be a substitute for legal advice
by competent, qualified counsel on any legal matter affecting e-BRs. Moreover, the
issues described here (and possibly others) would need to be appropriately adapted to
local circumstances within the framework of applicable Directives – what works in one
Member State may not be appropriate for another. In that sense, the issues discussed in
this chapter are intended to provide a framework for assessing next steps in the design
and implementation of e-BRs at the national level.
While the applicable Directives play an obvious role in determining the legal enabling
environment for the effective operation of e-BRs in the EU, this chapter goes beyond a
mere recitation of applicable Directives and looks behind them at the key legal elements
that need to be taken into account in the establishment, operation and use of e-BRs. An
indicative “checklist” of legal issues regarding the electronic aspects of e-BRs can be
found at Annex I.
26
Objectives of Legal e-BR Reforms
As with all matters of legal reform, the underlying purpose of ensuring a proper legal
enabling environment for the function of e-BRs is to produce legal and transactional
certainty and transparency to encourage use of the e-BR.
This chapter proposes a holistic, methodological framework to constructing the legal
enabling environment for the maintenance, operation and use of e-BRs. A starting point
is an understanding that the establishment of an e-BR is more than merely a conversion
of an existing paper-based, analog registry. The electronic aspects of the registry trigger a
number of issues that should be analyzed. Electronic registries raise issues of access to
computing infrastructure, storage of data, authentication of users, how to treat “form
requirements” (e.g., functional legal equivalents of notarized paper copies and other
evidentiary requirements, and whether there is a “priority’ of one type of filing or record
over another (paper vs. electronic).
In analyzing these questions, it is recommended that, when designing the registry and its
process, legal functionalities should be included in a dynamic design paradigm along
with technical and business process issues. Decisions about registry design should
include inputs from the “business process” decision makers, the technical design team
and the legal team in a dynamic fashion that cut across functional boundaries (see Figure
9Error! Reference source not found.).
: The Legal Framework Design is Dynamic
The Legal Framework Design is Dynamic
Business Process
BUSINESS
Technical
PROCESS
Legal
LEGAL
TECHNICAL
27
Key Legal e-BR Issues
Detailed legal issues need to be addressed to ensure an appropriate legal authorization
process and an adequate legal enabling environment for a successful e-BR. These key
legal issues consist of the following (discussed in detail in Annex 1):
Assigning adequate powers to the business registry;
Choosing the nature and scope -- transparency -- of information to be provided by
the registries to the public;
Defining the degree of privacy and treatment of non-public information retained
by the registry;
What types of companies to include in the registry (i.e. listed Vs non listed);
How to avoid multiple filings, domestically and internationally;
Ensuring the legal validity of electronic documents and electronic signatures;
Defining the rules of dispatch and receipt the transfer of data through the e-BR;
Ensuring the e-BR’s data integrity and protect its data base;
Considering the e-BR as ‘Critical Infrastructure’ and subjecting to the Critical
Infrastructure Protection (CIP) rules;
Protect the e-BR from cyber-crime; and
Ensuring the legal interoperability of the e-BR with other government data bases.
28
6. Good Practice Public-Private Partnerships for e-
BRs
Contracting with private sector actors to create and provide some or all e-BR services
would be useful in EU New Member Countries. Such arrangements are called public-
private partnerships (PPPs). Among the many public policy objectives that could be
served by using PPPs are (a) reduced costs, (c) improved efficiency, (d) improved quality
of service in delivery of public services, and (e) the potential to transfer certain risks
away from the public sector in the provision of these services.28
PPPs can lead to increased efficiencies in the design, building, financing, operating and
delivery of public services.29 Introducing a well-designed PPP is useful when some or all
of the following characteristics are in place:
The public budget for the implementation of the e-BR is insufficient or scarce;
The private sector is interested in investing, even when up-fronting the needed
investment cost for e-BR implementation may be difficult;
Levels of technical skills/capacity in the IT cadre of the public sector are
insufficient to implement an e-BR, or fall short of the skills available in the
private sector;
Levels of skills/capacity to manage a sophisticated e-BR system do not exist in
the public sector; and
An incentive structure for rewarding timely and qualitative performance is absent
in the public sector.
Under such conditions, opportunities and motivations for a private involvement in the
delivery of public services are increased.
Good Practice Examples of PPPs in e-BR Implementation
Countries should define PPP frameworks in accordance with their local needs and
context; as in other areas of development economics, no one template fits all. But
implementing an e-BR with a private partner, and later managing and operating it with
possibly the same or other private partners, is an important and long undertaking that
needs to be carefully designed. Several good practices can be distilled from existing e-BR
PPP frameworks around the world:
28
See, Chapter 6, Public-Private Partnerships in e-government : Knowledge Map and Toolkit, infoDev and
IP3 (Institute for Public Private Partnerships) (forthcoming) (“infoDev/IP3 Toolkit”)
29
infodev 2007, Public-Private Partnerships in e-government: Knowledge Map, Toolkit and Training
Material (forthcoming)
29
In Austria, the Ministry of Justice owns e-BR data, while eight private clearing
houses are on PPP contracts to
provide services (some for niche e-BR PPPs
clients) and share profits with the
public sector. Ireland
In Latvia, a private firm provided The Irish companies’ registry, “Companies Online
the initial investment for the Registration Environment” (CORE) is an
creation of the e-BR, but keeps electronic registry operated by a private party
all transaction profits. It is on a under a PPP arrangement.
term contract to provide software www.cro.ie
and services.
Latvia
In Denmark, the Danish e-BR The Latvian business registry is also operated
has pre-qualified a group of 7 through a PPP agreement with a private operator..
firms for contracts in e-BR www.lursoft.lv
implementation and service
delivery. Of the seven firms, four
resell data from business register and two handle only annual accounts. The seven
private partners pay royalties to the government. Profits are reinvested in the e-
BR.
One of the challenges of implementing or managing an e-BR through a PPP may be the
retention of competitiveness among private sector firms. Denmark and Austria have
solved this predicament by dividing the e-BR work program among several firms, some
of which cater to different business needs or clients. For example, in Austria, one of the
PPP firms caters only to lawyers and notaries by providing e-BR data and services of
interest to that clientele.
In countries where one firm only is partnered to work on the e-BR, or one firm wins the
largest contract and share of the work, a lack of competitiveness may take root over time.
One consequence may be that the private partner provides de facto monopoly e-
government services to the e-BR and to other agencies that sign on, which does not
facilitate interoperability with systems created by other private firms for other agencies.
Legal Aspects of Public-Private Partnerships (PPPs)
The business registry’s competence is a function of the national law that gives rise to it.
The office of the “registrar” is a public office. Generally, the registrar has the duty to
maintain the registry, issue certificates and other public documents. The registrar will
also be charged with overseeing the filing of documents and ensuring the reliability (and
certifying as to the authenticity) of that information. With the shifting of these functions
from a paper-based to an e-registry and the provision of registry services through PPP
arrangements, questions arise about responsibilities for maintaining the registry and
providing registry services, such as issuing certificates which can be relied on as
authentic legal documents. Moreover, even though outsourced to a private party via a
PPP, the registry is still a “public good”, raising issues regarding the integrity and
30
availability of the database notwithstanding a private operator's legitimate grievances
(e.g. nonpayment, etc.). This highlights the necessity to address in the PPP contract
remedies and recourse of the operator that do not impair the public good.
The agreement creating the PPP would need to explicitly define the responsibilities of
both the government and the private provider, including their respective roles in issuing
of certificates. It may be that, under national law, only a governmental agency can issue
an official certificate and this function cannot be “outsourced” to a third party. Clearly
identifying responsibilities for operation of the registry and provision of registry services
is closely related to liability issues for operating the e-BR (discussed below), as well as
the authenticity and legality of certificates or documents issued by the e-BR. This
allocation of responsibility would normally be coupled with appropriate indemnities. In
this sense, the government party may need to waive any sovereign immunity to give
effect to the indemnity.
If registry functions are outsourced through a PPP, the transparency of the e-BR’s
operations and service provision should also be addressed in the PPP contract. It may be
that, under national law, the operation of the e-BR by the public authority requires certain
transparent processes. The public party will need to ensure that these obligations are
“passed through” to the private party.
By its nature, the e-BR contains valuable, and possibly even sensitive, information about
business entities. To the extent that the public party is obligated to ensure the integrity of
the data in the registry, the PPP contract should “pass-through” this obligation to the
private party. Use of the data in the database beyond the purposes for which it is intended
should also be dealt with in the PPP contract. Likewise, there may be requirements that
the public party disclose certain information about the private party, or about the PPP
arrangement.
a) Legal Enabling Framework for PPPs
The legal framework or enabling environment for PPPs will vary from country to
country. In some countries, there will be specific laws regarding the establishment of
PPPs. Sometimes these can be found in concession or similar laws, which can fix the
scope of application of PPPs, possibly the rights and obligations of the parties, selection
and approval of projects, public roles and responsibilities and possibly even dispute
resolution.30
b) Forms of PPP Arrangements
The nature of such an arrangement could range between a service contract (where the
government would contract the service provider to operate, maintain and manage the e-
30
Ibid. See chapter 7.
31
registry); a franchise (where the government would grant a concession to a service
provider to operate the e-registry, regulate the fees and set the standards of the registrar
services, for which the service provider takes payments directly from the users); and a
hybrid model. Depending on the nature of the PPP, the service provider could also be a
mere agent of the government in the issuance of these documents. One of the
distinguishing features of the different kinds of contractual arrangements that embody
PPP relationships is the allocation of risk between the parties. (See, Figure 10, which
shows the different types of contracts).31
32
Type of Contract What the Private Contractor Receives Nature of Private Contractor
Performance
Service Contract Fee from government for performing a Definitive, often technical type
(outsourcing) non-core service of service
Management Fee from government for the service and a Manage the operation of a
Contract performance-based incentive government service
Lease All revenues, fees or charges from Manage, operate, repair, and
consumers for the provision of the maintain (and maybe invest in)
service; the service provider rents the a service to specified standards
facility from government and outputs
BOO & BOOT The government mostly pays the service Construct and operate, to
(Build-Own-Operate provider on a unit basis specified standards, the
and Build-Own- facilities necessary for service
Operate-Transfer) provision
Concession All revenues from consumers service Manage, operate, repair,
provision; the service provider pays a maintain and invest in public
concession fee to the government and service infrastructure to
may assume existing debt specified standards
Following are brief descriptions of each type of PPP contractual arrangement and their
distinguishing features.33
Service Contracts (or outsourcing) - Service contracts are agreements between a
government authority and a private partner to perform specific, usually non-core
tasks. These, usually short-term contracts provide the government with private
sector expertise, and save time and money spent on non-core services.
31
Ibid, Chapter 4.
32
Taken from Chapter 4, infoDev/IP3 Toolkit.
33
Ibid.
32
Management Contracts - Management contracts transfer responsibility for the
operation and maintenance of government-owned entities to the private sector.
Asset ownership and commercial risk remains with the government, while
management control and authority are transferred to a private partner, which
applies its expertise to improve management systems and practices.
Compensation may be in the form of a fixed fee, as in the case of a fixed fee
management contract, or it may be linked to performance indicators.
Leases - There are two primary ways in which lease agreements function. One,
the private sector builds an asset and leases it to the State for operation.
Alternatively, the private sector operates an asset owned by the State and pays the
State rent, while collecting fees from end users.
BOT and variants – Build-operate-transfer (BOT), build-own-operate (BOO),
build-own-operate-transfer (BOOT), design-building-finance-operate (DBFO)
and similar arrangements are contracts specifically designed for new projects or
investments in facilities that require extensive rehabilitation. Under such
arrangements, the private partner typically designs, constructs and operates
facilities for a limited period of time; after which time all rights or title to the
assets are relinquished to the government. Under a build-operate-own (BOO)
contract, the assets remain indefinitely with the private partner. The government
will typically pay the BOT partner a price calculated over the life of the contract
to cover its construction and operating costs and provide a reasonable return.
Concessions – Under a concession, the private partner ("Concessionaire") bears
overall responsibility for the services, including operation, maintenance, and
management, as well as capital investments. The fixed assets either remain the
property of the public authority or revert to public ownership at the end of the
concession period. One of the main features of a concession is that it passes full
responsibility for operations, maintenance, rehabilitation, renewal, and service
expansion to the private partner and so creates incentives for efficiency in all
activities.
c) Allocation of Risk
There are many areas of potential liability and risk in PPP arrangements. A major part of
any PPP contract will be about allocating this risk and assigning liability. For example,
liability may arise where the integrity of data in the registry is compromised, data are
misused34 or the privacy of individuals’ data is violated. The PPP contract should address
liability for data protection and data base management.
34
These issues are covered by the Directive on the Legal Protection of Databases, adopted by the EU
Parliament and Council on March 11, 1996.
33
Second, there may be cases where the data provided by users to the service provider is
misused or becomes vulnerable to abuse by third parties. This would happen in cases in
which third parties intercept, tamper or even manipulate data being sent to the service
provider or already existing in the service provider’ systems. The PPP contract should
deal with liability issues arising from third party actions resulting in damage to users.35
Third, the PPP contract will have to deal with liability for system failures hampering the
daily operations of businesses, or worse still, compromise of critical infrastructure
resulting in unintended harm to data. It has been suggested that the public partner should
assume contractual responsibility for security systems notwithstanding that the service
provider would have the contractual responsibility to provide fully functional, secure
systems.36
Fourth, the PPP contract should deal with preparedness in the event of an emergency
affecting the e-BR. The PPP contract should define the appropriate level of necessary
security to protect critical infrastructure and information, and also state clearly the
desired and market achievable security and avoidance of risks that the provider should
have in place. Private sector actors may not have incentives to invest heavily in
emergency preparedness for its systems (especially where the systems are not owned by
the private sector party),37 and the public partner may have to assume the responsibility
for addressing any emergency preparedness.
The fifth area of concern relates to delays in the case of time-sensitive transactions in the
e-BR. The PPP contract should determine which party has the responsibility for
preventative and remedial matters regarding interruptions to the operations of the
registry.38 Again, the fact that private actors may lack incentives to invest in security and
risk preparedness should inform the allocation of responsibilities in the contract.
d) Recourse against service provider
The PPP contract will need to address responsibility in the case of negligence and provide
appropriate indemnification for gross negligence or intentional acts on the part of the
service provider. In the same spirit, the PPP contract should list any applicable service
provision standards or standards of conduct.
35
The EC recognizes the importance of having an Agency charged with Network and Information Security.
This regulation places a heavy duty on EU Member countries to ensure that systems are secure and best
practices are put in place to ensure protection of data, and to safeguard the security of services conducted
electronic networks.
36
See, e.g., CIIP Handbook, Vol II, Analyzing Issues, Challenges and Prospects, explaining that private
actors lack motivation to provide public goods. The overall security of an e-registry is a public good.
37
Ibid.
38
See Commission of the European Communities (2005), Green Paper on a European Programme for
Critical Infrastructure Protection.
34
e) Intellectual Property Rights
One of the main intellectual property rights issues raised by electronic data bases is the
copyright treatment of the collected data of various persons as a “compilation.” While, in
general, the party whose data is in the database has the rights over its own data,
compilations of such data are generally not the copyright of any individual, and the
database operator may be able to claim copyright in the compilation. This raises thorny
questions about who has the copyright over data in a database such as an e-BR, and what
the rights of the e-BR operator (government or perhaps outsourced private sector party
under a PPP) in the database are vis-à-vis the data subjects’ rights.
Some of these questions are addressed in the EU’s Directive on the legal protection of
databases, which provide a definition of a “database” – "a collection of independent
works, data or other materials arranged in a systematic or methodical way and
individually accessible by electronic or other means" – and defers the copyright question
to the national law of the Member State on matters such as reproduction of information,
distribution, etc.39
Note that good practices registries, such as in Latvia, allow the use of a large part of the
registry’s data by the operator to produce and sell statistical and research resulting from
the analysis of the registry’s data.
f) Cost Recovery
Since PPP are complex to design, implement and operate, it will be important for the
contract establishing the e-BR partnership to include clear provisions ensuring that the
service provider realizes financial returns for its investments and services to the public.
The financial consideration for the services provided can take the form of shared
revenues between the partners based on a percentage. The sharing formula can depend on
the volume of e-transactions. In such a case, the government would have to guarantee
sufficient opportunity for the service provider to generate revenues. This guarantee would
have to be matched with the government’s concern that the service provider does not
provide below average services. The contract must therefore be specific on expected
standards.
The service provider may also receive compensation for services provided to the public
in the form of a fixed fee. In such a case, the PPP contract would need to be clear as to
the duration of the contract and how much such a fee would be. Again, the fee would be
based on the availability and performance of the e-BR and associated services. The
government can reserve the right to make deductions for non-availability or poor
performance of the e-BR.
39
Database Directive see articles 1(2), 3, 5 and 6.
35
All in all, the cost recovery strategy should be based on the quality of service, the
investment cost of the e-BR, and the tariffs that users are willing and able to pay. The
parties to the e-BR would have to agree on how to supplement shortfall of revenues, if
that ever was to happen.
g) Dispute Resolution
Potential problems resulting from the operation and use of e-BRs raise a number of
special legal and technical issues (such as disputes about dispatch and receipt,
integrity/alteration of data, authentication of persons and electronic documents, to name a
few) that would seem to lend themselves well to alternative dispute resolution (ADR)
mechanisms established to deal with those specialized problems. ADR has a number of
attributes suitable for application to the specialized problems and disputes raised by e-
BRs. Special rules can be established to address the peculiar problems raised by e-BRs
(industry orientation), and ADR can be quicker and more flexible than ordinary
adjudicatory settings. Because it can be less formal than the courts, ADR can allow the
use of industry best practice and related relevant experience from other jurisdictions,
permitting the ADR process to address situations that may not be explicitly dealt with by
existing law. Accordingly, in designing the enabling legal framework for e-BRs,
consideration could be given to including ADR mechanisms.40
Important Considerations for the PPP Contract
When designing a PPP with the chosen private partner, the following areas are
particularly sensitive to the project’s success, and should be carefully addressed:
1. Fees for transactions
2. Profit sharing agreement
3. Ownership of the data
4. Intellectual Property rights
5. Security and Privacy issues
6. Public sector oversight
7. Openness to competition of PPP arrangements
8. Consultation with stakeholders
40
At the time of writing, a Draft Directive on certain aspects of mediation in civil and commercial matters
was being considered in the EU, which can be found at:
http://www.richardbutler.net/Euromed/DraftDirective0905.pdf
.
36
7. Monitoring and Evaluation of e-BRs
Reforming, automating and web-enabling a business registry is costly. To measure the
results of such a reform, it is useful to create baselines for collectable, calculable, and
sustainable monitoring and evaluation (M&E) indicators and track them at regular
intervals after implementation. Sample indicators could be:
M&E of Implementing an online e-BR platform
Indicators
Inputs Annual costs to public sector of running the business registry (before and after
implementing the online e-BR platform)
Annual costs to the private sector partner (if any) of running the business registry
(before and after implementing the online e-BR platform)41
Total Investment costs of implementing the online e-BR platform (public plus private
investment)
Private investment in e-BR reform (% of total investment)
Projected number of years until investment costs will be recouped
Actual number of years until investment costs were recouped
Outputs Number of registered users of the business registry (# of login accounts) per year
Number of information downloads per year
Number of information uploads per year
Annual revenues of the e-BR operations
Annual profits of the e-BR operations (government plus private partner profits)
Outcomes Cost of a basket of typical annual transactions with the business registry before and
after the reform42
Average processing time for (a) business registration, (b) business de-activation before
and after implementing the online platform
Waiting time to process a transaction before and after the reform (includes average
time needed to reach business registry office, queues, follow-up visits to same or other
governmental offices, etc)
Processing time for a rush-order transaction before (if it was possible then) and after
implementation of the online platform
Number of interlinked e-government services (of different agencies) before and after
reform
Impact Annual savings for the registry of moving the business registry transactions online
Annual savings for firms for moving the business registry transactions online
Private sector’s satisfaction with the business registry before and after automation
(survey)
Annual number of new business registrations (before and after implementing the online
e-BR platform)
41
For situations in which a public-private partnership did not exist prior to the reform, the pre-reform data
point for this indicator would be equal to zero.
42
A typical basket of services would need to be defined by the local country context, which would not
make this data point comparable across countries.
37
8. Integrating e-BRs into National e-government
Frameworks
E-Government as a Tool for Public Sector Reform
E-government is about bringing better and cheaper government services to citizens,
businesses and other government agencies. It is often defined as the provision of services
and information by electronic means between different sections of government (G2G),
between government and business (G2B), and between government and citizens (G2C).
Available evidence shows that the countries most successful at implementing e-
government services are those that focused on reforming their public sector rather than on
automating existing procedures.43 Business registry reform, both administrative as well as
technical, should therefore be an integral part and a core instrument of the national e-
government strategy.
Successful e-government services, including e-BRs, need to focus not only on the
“vertical” specialized applications provided by individual government entities, but also
on the “horizontals” that relate to the cross-cutting aspects of e-government. The
“horizontals” include, for example, interoperability frameworks and standards, enterprise
architecture, security standards/processes and shared infrastructure and services. Below is
a graph that illustrates the horizontals and verticals of e-government services.
Framework for ICT in Government
Citizens, Businesses, Government, Civil Society
Energy/Transport
Financial Mgmt
Customs/Tax
Land Admin
Education
Health
Verticals
[Business models,
Multi-channel service
delivery…]
Policies, Laws, Regulations, Institutions, Standards, Knowledge
Horizontals
Shared Services
[Interoperability,
Security…]
Shared infrastructure
43
E-government is defined by the OECD as “the use of ICTs, and particularly the Internet, as a tool to
achieve better government.” For the OECD, this means that “the impact of e-government at the broadest
level is simply better government – e-government is more about government than about “e”. It enables
better policy outcomes, higher quality services and greater engagement with citizens. Governments and
public administrations will, and should, continue to be judged against these established criteria for
success.” (OECD, The e-government Imperative, 2003).
38
It is not uncommon that governments looking for ‘quick wins’ in the area of e-
government will concentrate their efforts and resources on the verticals. Such efforts,
when successful, generate support from civil society for e-government reform, and their
value should not be underestimated. However, experience shows that the development of
‘verticals’ without due consideration to ‘horizontals’ tends to generate significant
negative effects, which more than offset previously registered benefits. For one, the
isolated development of verticals tends to perpetuate, or even feed, ‘silo cultures’ across
ministries, making it much more difficult and costly to allow separate applications to
communicate with one another, and significantly diminishing opportunities for
economies of scale and scope. Additionally, focusing exclusively on verticals tends to
strip an e-government reform from its most important long-term benefits, since it is the
horizontals that yield the most significant potential as tools for reform of the public
sector.
Electronic registries of various types should hence constitute a priority area for
governments in the process of designing and implementing an e-government vision,
policy and strategy, as they are cross-cutting in scope and support a broad array of
applications relevant to a range of stakeholders.
Benefits of Governmental Registries’ Interoperability
The benefits of e-BRs as part of an interoperable set of governmental e-Services are
numerous. Among them:
The digitalization of multiple, connected registries offers immediate and
visible benefits to firms. The interoperability with registries such as pledge
and land registries can offer a one-stop-shop for loan applications by
businesses, while their interoperability with other registries many facilitate
other services useful to businesses (e.g. fiscal exemptions, staff search, etc),
eliminating the way for multiple entry of basic data and information.
Interoperability (a central part of the ‘horizontals’ of successful e-government
strategies) yields other obvious benefits in the case of business registries. For
example, when business registries can be shared between various
administrations such as tax services, customs, and public procurement entities,
new services can be offered to registered businesses such as pre-payment of
taxes, pre-payment of customs duties, and automatic warnings about public
tenders in which a particular company might be interested. Such
interoperability comes as a ‘natural feature’ of e-business registries.
Once such an effort of informatization has been implemented for business
registries, it is easily transposable to other registries (for example taxes,
statistical offices – e.g. for trade or labor statistics -, land registries),
increasing opportunities for economies of scale, better public services, and
39
more savings for businesses. Statistics become more reliable and comparable,
more timely, and less expensive to collect, compute and publish.
Interoperability of databases,
registries and online Credit
services bring benefits Info. Land /
Business Pledges
Registry Registry
Personal
Registry Interoperability
of e-Gov online Trade
database
Tax services
Authority
e-Procure-
ment
Car/Ship
e-Business Registry
e-Commerce
For all those reasons, it is considered ‘e-government best practice’ that e-BRs be a
component of the ‘Enterprise Architecture Framework’ of any e-government strategy. As
such, e-business registries also have to comply with shared implementation principles
adopted by such strategies.
Several countries provide good practice examples of integrating registry services. Latvia
interlinked several of its registries (see Table 2). The land registry is external but largely
interlinked. Latvia uses online banking authentication methods while electronic
authentication authority is being accredited.
It is not always easy to make various registries interoperable. Indeed, while some
agencies cooperate, others are concerned with protecting their turf. In addition, country-
specific solution are needed on whether to have one centralized IT agency, or
decentralized IT departments in each agency, or a strong coordinating IT agency. In all
case, it is necessary to ensure nation-wide interoperability and coverage for universal
access. But, help desks and municipal offices can facilitate the initial transfer to the
online platform.
Important Institutional Considerations for e-BRs and e-
Government Dynamics
40
The following aspects are lessons learned in e-BR and e-government dynamics. Good
practice implementation includes that the government:
Outline larger policy objectives first and embed them in registry design; such an
approach can for instance be centered on domestic SMEs (as job creators, innovation
flag-bearers, for example), or on international companies (e.g. foreign investors for
whom e-registration means less red tape, and is generally a visible marker of a good
investment climate);
Earmark a reasonable public budget for e-BR design and implementation, while
keeping the door to private-public partnerships and encouraging the involvement of
external players such as chambers of commerce; in addition to earmarking a budget,
central governments need to take the lead in e-BR reforms and e-government
strategies by providing guidance and leadership, at least in the initial stages of e-BR
design and implementation;
Foster a strong e-government champion and e-government agency; this is a
prerequisite for the successful implementation of an e-government strategy, and it
will be of direct benefit to the rapid and sustainable implementation of e-BRs. Many
countries report problems in having Ministries agree to make their systems
interoperable with a one-stop-shop. In Denmark, for example, arguably the more
“open” Ministries are included in “VIRK” (English: work), the online system that
links the e-BR and several other e-services, including e-taxation;
Coordinate actions and initiatives in areas relevant to e-BRs (such as the legal and
regulatory environment, the technical implementation of measures linked to a better
business environment and investment climate, etc.) with a view to align them as much
as possible with the development and availability of adequate IT systems. Nothing
can be more detrimental to the cause of e-BRs than a premature launch, leading to
failure (and backlash) because one link is missing in the chain, may it be legal,
regulatory or technical44;
Avoid turf battles. Some agencies will cooperate; others will be protective of their
mandate, their data and their services. Change management will hence have to be a
key component of both e-BR and e-government strategies;
Consider carefully which country-specific solutions are the most relevant sources of
‘best practices’ on whether to have one centralized IT agency, or decentralized IT
departments in each agency, or a strong coordinating IT agency;
Ensure nation-wide interoperability; this is a key ‘horizontal dimension’ of e-
government, which needs to be imbedded in the earliest stages of e-BR (and other
registries’) design;
Accelerate the provision of universal Internet access; this is a far reaching national
objective that goes beyond both e-government and e-BRs; various approaches should
be considered (and possibly combined) to reach this objective, including PPPs,
44
Sometimes ‘interim solutions’ can be used, whereby an ‘emerging process’ and a pre -existing one can
overlap for a certain period of transition: this is frequently the case while implementing ‘multi -channel e-
government services’ (on-line and manual systems being allowed to co-exist for a while). It may also
happen that a country will choose to launch a particular service even though the relevant regulatory /
supervising authority has not yet been fully established: for example, Latvia started to use online banking
authentication methods while its electronic authentication authority was still being accredited.
41
outsourcing and local solutions such as shared public access points (e.g. through local
chambers of commerce or SME incubators), or WiFi / WiMAX broadband access;
Offer help desks and local support (e.g. through municipal offices) to facilitate first
transfer to online presence;
Provide incentives to firms (especially SMEs) to become paper-less.
Train civil servants whose job descriptions will be modified; such training (or re-
training) should be considered as a tool for career upward mobility in the public
sector; it should grant a significant role to life-long learning and e-learning;
Encourage civil servants to upgrade their performance and adapt it to an e-
government environment; part of the savings generated by the migration away from
paper should be used to that effect;
Communication and sensitization campaigns will need to be carried out for policy
makers, civil servants, business leaders and citizens, to inform them of the plans
being considered or implemented, and raise awareness of the benefits they can expect
to receive from a nationwide implementation of an interoperable system;
The e-Enabling Environment
To deliver on e-BR’s promises of efficiencies and savings, it is critical that countries
adopt policies for a positive, enabling e-environment for e-government in general. This
encompasses policy, legal, market, and social considerations that interact at domestic and
global levels to create fertile conditions for successful e-government services. They can
be illustrated by three layers:
The trust layer involves creating the enabling environment for improved citizen
and private sector confidence and trust, especially in a pro-competitive legal and
regulatory environment. Areas in which regulatory reform will be most important
are the independent regulation of communications services and infrastructure,
data privacy protection, security, intellectual property rights, Internet governance
(including domain name registration), protection of critical infrastructure, and
conforming to general principles of competition. In return, e-government can also
contribute to creating an attractive investment climate, and building investor
confidence.
The access layer involves creating the enabling environment for access to e-
government services. This includes facilitating the proper choices in public
infrastructure, its technologies (e.g. broadband deployment), easy access to
hardware and software needed by e-government users, and its universal
accessibility by rural and marginalized populations such as the disabled or the
poor. Moreover, this layer should address the social implications for access, such
as maximizing the country’s potential in literacy rates, promoting capacity in
computer and IT skills among the general population (e.g. through ICT education
in primary, secondary, vocational and tertiary schools) and improving school
enrollment.
The applications layer involves creating the enabling environment for improved,
innovative, interoperable e-government applications. Policies that need to be
42
considered have in part been discussed earlier, and in short, are (a) implementing
interoperability among government systems, operating norms and shared
infrastructure (some of the vertical pillars of e-government Architecture discussed
earlier), (b) implementing electronic signature laws and online user authentication
that have full standing under the law, (c) promoting innovation and creativity for
content solutions, and (d) contracting with the private sector as a partner in
building applications and delivering services.
These layers are important elements to be considered when embarking on an e-BR
reform.
Conclusion: Recommendations
43
Annex 1: Legal Aspects of Establishing, Implementing
and Using e-BRs
The Legal Authorization Framework for Business Registries in the EU
This section describes the key legal decisions that policy makers will need to make in the
design phase of implementing an e-BR. Note that the first three questions pertain more
generally to business registries than to online business registries per se.
i) Judicial v. Administrative Regimes for the Registries
The members of the European Union use two separate regimes for the registration of
business enterprises. Many countries such as Slovenia, Germany, and the Czech Republic
use a court-based system in which business enterprises are registered with a designated
commercial court and all initial and subsequent filings regarding corporate events are
made with the court. The relevant commercial court oversees the operation of this activity
which is handled by an administrative unit of the court. Other countries such as the UK,
Spain and Sweden use a separate administrative agency to handle the enterprise filings.
Both of these systems work well and there is no intrinsic superiority of one over the
other. The important issue is the internal organization and efficiency of the unit
responsible for the activity.
ii) The Location of Administrative Registries within the Governmental Structure
In establishing an administrative agency, a decision must be made as to where to
establish the registry: in a new administrative agency under the supervision of a ministry,
as part of an existing ministry or outsourced to a private company as a contractor. For
example, in Latvia, The Register of Enterprises is a separate legal person that acts under
the supervision of the Ministry of Justice. In the UK, the Companies House is an
Executive Agency of the Department of Trade and Industry (DTI) which is somewhat
administratively separate from the DTI but does not have a separate legal status. In
Sweden, the Companies Registration Office is a separate government agency under the
Ministry of Industry and its Director General is appointed by the government; however, it
is not funded from the state budget and relies on fees for its services to finance its
activities. Some countries such as Austria and Belgium have outsourced the registries to
private contractors through “public-private partnership” (PPP) arrangements (discussed
below), under supervision by the government.
The trend for administrative registries is towards financially self-supporting institutions
which benefit the budget; however supervision is needed by the government to ensure
that fee schedules are reasonable.
44
iii) The Powers of the Registries
Registries throughout the EU have the authority to collect basic information on business
enterprises in line with the requirements of the First Directive45. However, this authority
does not extend to verification of the data, such as the financial statements of the
company. Some registry offices in Asia have the responsibility to go further than accept
the filing, but this has not been the case in the EU. Compliance with the filing
requirements is enforced by the establishment of penalties for the failure to file data as
well as the filing of false, incomplete or inaccurate data.
Registries have the power to make information filed with them available to the public. As
a result, the data is not only useful to the government in its monitoring of economic
activity in the country, but is also available to citizens as a means of identifying or
monitoring commercial counterparties.
Registries established under the supervision of the courts also have a role in the
resolution of shareholder and corporate disputes. The information in the registry is indeed
readily available to the Court in evaluating the arguments of the parties to the dispute.
iv) Transparency: Nature and Scope of Information to be Provided by the
Registries to the Public
Article 2 of the First Directive sets forth a minimum set of information that an enterprise
should provide to the registry and the circumstances and time period in which the
information must be updated. The laws and regulations in the member countries
implementing this article require at least the minimum amount of information required in
the Directive. Nonetheless, a country could require more if it felt it were useful.
v) Privacy: Non-public Information Retained by the Registries - EU Directive
would relate to IDs of individuals that could be used for identity theft
Privacy laws related to personal data are generally not applicable to entities registering
with a business enterprise registry.46 However, Article 2.1(d) of the First Directive
requires information regarding the managers and directors of the enterprise to be made
available to the public. Each country will require a different set of data to meet this
general requirement in the First Directive. This information must be coordinated with the
relevant privacy legislation to ensure that no protected information regarding these
individuals is made public and vice versa that information that needs to be made public
by the registry can legally be made public.
45
First Council Directive - 68/151/EEC of 9 March 1968, as amended.
46
See discussion in §3.d, below.
45
vi) Centralized vs. Decentralized Registries
Even though Article 3.1. of the First
Directive requires that a Member State Italy – infoCamere
establish a “central register, Italy’s infoCamere is a private provider of
commercial register or companies database services connecting 103 chambers of
register,” it is not clear if each Member commerce to a single database operating under
State is obligated to establish a single, the auspices of the Ministry of Industry. It was
centralized register. Many Member created under a 1993 law that anticipated a
States keep their registries on a distributed, national business register. In 2003,
regional basis so that a company is electronic filings were mandated. InfoCamere
uses “advanced electronic signatures” for its
registered in the locality where it is
electronic transactions, and processes 2.5 million
situated. transactions per year.
www.infocamere.it
In the era of e-registries, this is not as
significant as in the days of paper Austria
filings. A central, digital registry can Business registration in Austria is conducted at
be maintained which is accessible by a the local commercial courts which are connected
data terminal in the various localities via a network to the Austrian Commercial
of the country. This is feasible even if Register. Electronic filing is mandatory in
the initial filings are made at the Austria but Austria does not issue “certificates”
regional level in paper format. Some or require the use of “e-signatures.
www.bmj.gv/at
countries, such as Germany and Spain,
have already established central
registries based on the regional data, which would appear to be suitable in Europe as
business is increasingly cross-border and the need for easy-to-access, centralized data on
businesses will increase.
vii) Registries for Listed vs. Non-listed Companies
Companies listed on a stock exchange and other publicly offered companies will have
more extensive disclosure requirements than the companies register. For the most part
this data is made available by the exchange or by the securities regulatory authority.
These registries should always be considered as a separate source of information, in
addition to, but not in lieu of, the data in the enterprise registry. However, facilitating
one-stop-shop access to these other sources through the business registry might be
contemplated to offer greater efficiency to users of corporate data.
viii) Subsidiarity (national vs. community (or cross-border) issues)
One continuing concern is the problem of multiple filings, both domestically in different
regions of a country and internationally as enterprises do more and more business in non-
domestic jurisdictions. Legal requirements will need to be in place to assure the
harmonization of the information that is supplied to the different registries, such as
46
mandatory periodic verification. This will be increasingly efficient with e-registries
where digitalized information can be quickly and cheaply compared.
ix) Other matters raised by the directive not addressed in the best practice
overview
One issue that must be resolved in the national law of member states is whether the
requirement in Article 3.3 of the First Directive that requests for information are to be
made “in writing” would be met by an e-request with a recognized e-signature. This is
best practice and should be put into effect in all member states.
The Legal Enabling Environment
This section describes legal issues that are related to the transmission of information
through the registry.
a) E-registry activities are C2G/G2C electronic “transactions”
In the electronic sense, the entry of data into the e-BR is an electronic transaction,
specifically a business-to-government (B2G) electronic transaction. As such, that activity
should be subject to the same treatment under national e-commerce and e-signature laws
as any other electronic transaction.
b) Legal validity of electronic documents and electronic signatures
The laws in member states regarding the legal validity of electronic documents and
electronic signatures are governed by some well-known directives.47 While much has
been written about those directives, we focus here on specific requirements with respect
to e-BRs. The first requirement is the authentication of parties supplying information.
Being able to reasonably rely on the fact that “X” is who X says it is, rests for a large part
on granting the same legal validity to the electronic signature that X uses in its filings
with the e-BR, as well as granting legal validity to the “electronic communication” (in
this case the e-BR filing). Authentication of the party submitting an electronic document
is usually governed by rules about electronic signatures.
Much has been written elsewhere about the legal validity of electronic signatures and
documents, and this chapter will not repeat the existing literature. However, it is
important to point out that the operation and use of an e-BR should take account of local
law in respect of what constitutes a legally valid electronic document as well as a legally
valid electronic signature. Electronic documents can be authenticated in a number of
47
First among these Directives are E-commerce Directive - 2000/31/EC of 8 June 2000 (E-commerce
Directive); the Electronic Signature Directive - 1999/93/EC of 13 December 1999 (e-Signature Directive);
and Distance Contracts Directive - 1997/7/EC of 20 May 1997. Other sources are described in supra notes
5 & 6.
47
different ways involving encryption, date- or time-stamping or the use of public/private
key infrastructure (PKI).48
The authentication of the party submitting the document, as well as the authentication of
its content, are key elements in ensuring trust in, and corresponding use of, the e-BR
system. In this context, consideration could be given to whether “weak” or “strong” e -
signature requirements are appropriate for making filings into the e-BR.49 Both “weak”
and “strong” signatures provide a minimum level of “authentication”, while “strong”
signatures also guarantee the integrity of the content of the electronic document to which
the signature is attached.
Cross-border recognition of digital certificates /signatures will be essential for the
realization of a pan-European system of inter-linked e-BRs.50
c) Rules on dispatch and receipt
Of particular relevance to e-BRs because of the time-sensitivity of certain filings are rules
of “dispatch” and “receipt.” In the context of the e-BR, dispatch is the time when an
electronic communications leaves the “system” of the sender (i.e., when a filing is made)
and “receipt” is the time at which that communications is received into the “system” of
the e-BR. If rules on dispatch/receipt are not defined in the Member State’s national laws
on e-commerce, or if they are not defined with the specificity required for purposes of
any time-sensitive filings in the e-BR, special legislation addressing questions of
dispatch/receipt may be required. The UNCITRAL Model Law on e-Commerce has
extensive provisions regarding rules for determining dispatch and receipt of electronic
messages.51
d) Data Integrity and Protection / Data base management
The two principal Directives regarding protection of data privacy apply generally to
natural persons. 52 Policy-makers when designing e-BRs will need to take account of
48
Possible future work on electronic commerce Comprehensive reference document on elements required
to establish a favorable legal framework for electronic commerce: sample chapter on international use of
electronic authentication and signature methods, UNICTRAL, ACN.9/630/Add.3, available at:
http://daccessdds.un.org/doc/UNDOC/GEN/V07/822/59/PDF/V0782259.pdf?OpenElement (UNCITRAL
Future Work). It is worth noting that while not an explicit requirement, the e-Commerce and e-signature
Directives essentially adopt a PKI-based approach which involves the issuing of so-called digital
certificates as well as the establishment of processes and organizations responsible for issuing such
certificates.
49
See, e.g., e-Commerce Directive – “electronic signatures” or so-called weak signatures are described in
articles 2(1); and “advanced electronic signatures” based on a qualified certificate (so -called “strong e-
signatures”) are described in articles 2(2) and 5.
50
Cross-border recognition is required by article 7(1) of the e-signature Directive.
51
See, article 15, and the accompanying text in the explanatory notes to article 15 in Paragraphs 100-107 of
the “Guide to Enactment” of the UNCITRAL Model Law on Electronic Commerce 1996 with Guide to
Enactment, with additional article 5 bis as adopted in 1998, (Uncitral e-Commerce Model Law).
52
Data Privacy Directive – 95/46/EC; Privacy and Electronic Communications - 2002/58/EC; Directive on
Data Retention – COM (2005) 438 (amends 2002/58/EC).
48
these directives to the extent that data regarding individuals are included in filings made
in e-BRs (e.g., information regarding officers or directors), information about individuals
filing corporate organizational documents prior to incorporation, or information about
individuals in partnerships. Related to data privacy protection are issues concerning data
storage, protection and use.
In cases where the data privacy directives do not apply (i.e., to legal persons, such as
companies, etc., as opposed to natural persons), e-BRs will still need to ensure the
integrity of the data of the legal person.
To a large degree, since an e-BR is a database, the applicable rules of the Database
Directive would apply to its operation.53
e) Critical Infrastructure Protection (CIP)
It is helpful to look at e-BRs as “critical infrastructure” that would be afforded the same
protection as other elements of critical infrastructure. 54 Maintaining and operating an e-
BR creates certain expectations on the part of users of the registry (both data contributors
and third parties seeking access to and relying on that data), as well as certain
responsibilities (and perhaps liabilities) on the “owner”/operator of the registry. While the
relationship between government and service provider is discussed in more detail above
in the discussion of PPPs, in this section the concern is about protecting the physical
aspects of the registry affecting the processing, collection, transfer and protection of the
integrity of the data housed in the e-BR. Those responsible for operating e-BRs will want
to ensure that any interruptions to the operation of the registry are brief, infrequent,
isolated and minimally detrimental to the Member States affected.55
f) Cybe-rcrime issues
Providing effective enforcement remedies and penalties are an important part of the legal
enabling environment for e-transaction activities, including e-BR activities. These
measures are sometime referred to as “cyber-crime” issues and address issues in the
digital, on-line world that similar criminal issues deal with in the physical world. The
typical issues dealt with under the rubric of cyber-crime include unauthorized access to or
interference with systems; unauthorized interception of or interference with data; misuse
53
Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal
protection of databases (Database Directive). The application of the Database Directive to intellectual
property matters raised by databases can be found in the text accompanying infra note 15.
54
For general principles applicable to critical infrastructure protection in the EU, see, Green Paper on
EPCIP - COM (2005) 576; and European Council Framework Decision on Attacks Against Information
Systems – 2005/222/JHA.
55
Op cit. An excellent survey of national and international CIP measures – including the national legal
frameworks – can be found in the CRITICAL INFORMATION INFRASTRUCTURE HANDBOOK (2006) (“CIIP
Handbook which can be found at:
http://www.crn.ethz.ch/publications/crn_team/detail.cfm?lng=en&id=16156
49
of devices; and fraud and forgery. The principal legal source for cyber-crime in Europe
is the Council of Europe Convention on Cyber-crime. 56
g) Interoperability
Interoperability has two components. At the national level, interoperability refers to the
ability of the e-BR to interact with other databases, i.e. the ability of the e-BR database to
be somehow linked to other governmental databases. Internationally, interoperability
refers (i) to the ability of persons outside the Member State to be able to access and rely
on data in the e-BR, and (ii) for e-BRs to be able to be used in a pan-European sense. In
both cases, interoperability is the key to ensure that (1) the e-BR system “talks” to other
systems in government (see also in the next chapter); and (2) recognizes the digital
certificates of a foreign country.
One of the main features of the pan-European e-BR network anticipated by the BRITE
(Business Register Interoperability throughout Europe) project sponsored by the EU since
2006 is that it would provide pan-European access to business data of registered firms.57
One of the principal legal drivers of this BRITE’s pan-European objectives is the
interoperability of the different national e-BRs. Cross-recognition of digital (electronic)
signatures is one important step in the direction of achieving cross-border
interoperability.
Finally, in the international context, interoperability also impacts on cross-border
jurisdictional issues involving the enforcement of rights and duties of data suppliers, data
users relying on data contained in an e-BR, and the obligations and liabilities of the
operators of e-BRs. In this sense, there is some overlap with the dispute resolution
matters that may be applicable to disputes arising under the maintenance and use of e-
BRs (discussed above).
56
Council of Europe Convention on Cybercrime,
http://conventions.coe.int/Treaty/en/Treaties/Html/185.htm
57
See http://www.imu.iccs.gr/sweg/papers/SS0606vanElstL.pdf
50
Annex 2 - Legal Checklist
The Legal Enabling Environment Regarding Electronic Aspects of Business Registries
a) Legal validity of electronic documents and electronic signatures
i) Authentication and non-repudiation
ii) Weak vs. strong e-signatures
iii) Certification of authority
iv) Cross-border recognition
b) Rules on dispatch and receipt
c) Data Integrity and Protection / Data base management
i) Data Collection, Storage, protection & use.
ii) Data retention
iii) Coordination with privacy rules
d) Critical Infrastructure Protection
e) Interoperability
i) With other governmental registries
ii) Cross-border with other Member State e-business registries
f) Cyber-crime issues
i) Access to/interference with systems
ii) Interception of/interference with data
iii) Misuse of devices, data
iv) Fraud, forgery
g) Other PPP Issues
i) Allocation of risk/liability
ii) Recourse against provider
h) Intellectual Property Rights
i) Ownership of data
i) Cross –border/ jurisdictional issues
j) Dispute Resolution
51
Annex 3 – Survey summary
I. Questionnaire Estonia Great Britain Hungary Ireland Latvia Lithuania Norway Romania Slovak Republic Slovenia
Basic e-BR functionality Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year
1. Do you have an online, Internet platform for your business registry?
X X X X X X (not full system) X X X X
a. If yes, in what year was the online platform launched and operating? X 2006 1997 - - - 1999 X 2001 2006 2004 2001 X 05/07*
b. Is it a central online platform (for the entire country), accessible via one Internet site?
X X - - - X X X 2003 X X X X 05/07*
c. Do local business registries (such as regional business registries or local courts)
feed data electronically to the centralized online platform? X X - - - N/A X NA 2004 X X X X
2. Can an entrepreneur register a new company entirely online? X X X X X X X X X 2007 X X
a. If yes, in what year was this reform implemented? 10/2005-
2007 2001 01/2007 2007 2007 X1 05/07*
b. Does this require any remaining in-person or in-paper steps? X X X X X X* X
3. Can one enter/change the firm’s name or address entirely online? X X X X X X X X X* X X
a. Does this require any remaining in-person or in-paper steps? X X X X X X X* X X
4. Can one enter/change the names of the firm’s management or board entirely online? X X X X X X X X X* X
a. Does this require any remaining in-person or in-paper steps? X X X X X X X
5. Can one pledge property and capital entirely online? Pilot
X X X X X X X running X X*** X X 2004
a. Does this require any remaining in-person or in-paper steps? X X X X
6. Are samples of the firm’s authorized signatures available online? X X X X X X X X X1 X
7. Does your online platform authenticate users? X X - - - X X X X X
a. Is relevant national legislation in force? X X - - - X X X X X X 1 **** X
b. Is the e-BR authentication in compliance with relevant national legislation?
X X - - - X X X X X X X
c. In what year did the relevant legislation enter into force? 2002 1999? - - - 2000 1999 2002 2004 2007 X1 2004
d. In what year was the authentication functionality launched on the e-BR site?
2003 1999 - - - 2002 1999 2006 2004 2007 X1 2005
e. Is this authentication method used also on other Internet sites, for example on e-
Government services sites or commercial banking sites? X X - - - X X X X X X1 X
8. Does your online platform have a legally valid electronic signature capability? X X P X X X X X X1 X
a. If yes, in what year was the electronic signature functionality implemented?
X 2006 2005 2002 X 2006 2007 X1 2005
b. In what year did the relevant legislation enter into force? X 2006 2005 2000 2003 2000 2007 X1 2004
9. Are extractions from your online platform accepted as true and correct copies under the law?
X X - - - X X X X X X1 X
10. Other than transaction fees, are there any access restrictions placed on potential registry users such
as credit information/rating agencies, commercial banks? X X P X X X X X X X
11. Can registry data be purchased or downloaded in bulk? Yes, but only from list of
companies (not all data
X X P X X X X X from the BR at once) X
12. If there are transaction fees for using the online registry, what is the average cost per transaction, if
any (please enter your price and currency information in the “Year” column)? If the transactions are free, Most free
please enter “$0.” small charge
X for others - - - 2.5 X 2 LVL X NOK 24 X1 Varies ***** X $0
13. If the services of a notary are needed, can a notary log in to sign a document associated with a firm, Not
or perform a notarizing transaction without needing in-person or in-paper steps? X P X X X needed X X X
14. If the services of an accountant are needed, can an accountant log in to sign a document associated
with a firm, or perform an accounting-related transaction without needing in-person or in-paper steps?
x* X P N/A X X X X X X
15. Is a firm’s annual account data viewable online? X X P X X X X X X X
a. If yes, in what year was this functionality implemented? X 1999 1998 1999 2007 2001 2006 2003
16. Is all historical data available online? If not, from what year is data available? X 1995 X X 1990 X 1991 X X 1997 X 2008 X 1990** X
17. Was the majority or all historical data scanned in? Collection of Documents
scanned/other data
X X X X X X X X entered manually X
18. Was the majority or all historical data entered manually? X X X X X 1991 X X X X
19. Did one or more private firms under a public-private partnership (PPP) agreement implement the
electronic business registry? X X X X X X X X X
20. Did one or more private firm(s) develop the online platform? X X X X X X X X X X
21. Does/do one or more private firm(s) manage/operate the online registry today?
X (only application
X X X X X X X support) X
52
NOTES
Notes for Estonia
* It has to be done by the member of the board and he/she can log in.
Notes from Hungary
The registration process in Hungary is on a regional basis. Each region or county has its own Registry Court (only one), which is responsible for the registration, modification and database maintenance. There are 20 region in Hungary, including the capital Budapest. The registry process belongs only to the Registry Courts, there are no private organisations for
registration. Only the Registry Courts have the right and the access to create new data in the database, and to modify the existing ones. Each Registry Courts can make any changes only in its own database. It means that, the Registry Courts are not allowed and are not able to modify the existing data of another county's Registry Court. Each Registry Courts
have the access to the database and can view the relevant data of those companies only, that are operating in the area (county) where the Registry Court is located in. The database of all the countrys Registry Courts is linked into one network, that collects all the data. Only the Customer Service of the Company Information of the Ministry of Justice and Law
Enforcement has the right and ability to view all the data in the database regardless to the location of the company. The Registry Courts are not under the authority of the Company Information, nor the Ministry of Justice and Law Enforcement. The Customer Service of the Company Information do not do any registration process. Its basic responsibility is to give
information about the registered companies from all the region. The Registry is founded from the national budget. The maintenance of the whole network, and the coordination of the necessary development are belon to the Minstry of Justice and law Enfrocement. Right now we do not have a web based application for sending the company documents directly to
the registry courts. What we do have right now, is documents that can be dowloaded from the internet and an e-mail address that makes it possible for the companies to send the docs electronically.
Notes from Latvia
1. Regarding question No.1: there is an online, Internet platform for the Register of Enterprises of the Republic of Latvia only regarding the Commercial Pledge Register and the Marital Property Relations Register.
2. Regarding question No.2: electronic registration is available and optional in Latvia. To implement electronic registration it is necessary to make amendments to the Commercial Law and Law on The Register of Enterprises of the Republic of Latvia. In compliance with the second section of Article 10 of the Commercial Law the signature of a person on an application
for the recording of a merchant in the Commercial Register, as well as the capacity to act of this person, shall be notarised. As soon as the amendments to the Commercial Law come into force, in compliance with the provisions of the Commercial Law the signature of a person on an application for the recording of a merchant in the Commercial Register,
as well as the capacity to act of this person, shall be notarised or certified with safe electronic signature and time seal. At the present moment a person can submit documents electronically on amendments in the corresponding registers as regards already registered legal subjects to the Register of Enterprises of the Republic of Latvia, if the signature
of the person on the application is not be notarised. At the present moment the technical platform has been prepared and the amendments to the relevant national legislation have been drafted in compliance with which it will be possible to register a new company entirely online.
3. Regarding question No.12: in compliance with the provisions of Cabinet Regulation No. 544, adopted 21.06.2004. “Rules Regarding the State Fee Payment for Furnishing Information from the Registers of the Register of Enterprises” (hereinafter - Cabinet Regulation) regarding the Commercial Pledge Register and the Marital Property Relations Register the state fee
for furnishing information is 2 LVL (Clause 2.5. and Clause 2.6. of Cabinet Regulation). The amendments to the relevant national legislation will be drafted in order to provide separate rates of the state fee payable for using the online registry electronically
Note for Lithuania:
Currently the submission of the registration documents to the Register of Legal of Entities in an electronic way has not been implemented yet because there is no proper legislation and operating electronic signature infrastructure. At the moment the legislation is being drafted and electronic signature infrastructure is being implemented. At the moment we have an
active information system with an opportunity to submit documents of financial accountancy and disclose their data electronically Authentification for Submission of annual accountancy is realized via e-banking system
Note from Romania:
- National Trade Register Office website (www.onrc.ro), available in Romanian and English, provides information concerning the organization and functioning of the institution, downloadable registration forms, completion guides of the forms, the list of the documents required for registration and functioning of trade persons, the fees , statistics, etc.
- Recom Online Service (http://recom.onrc.ro), launched in 2002, based on a software which allows access to the recordings of the computerized trade register, regarding trading companies; self-managed public companies; 'co-operative organizations; authorized natural persons; family associations.
The main advantages of this service are real time information from an authorized source, service available 24 hours a day, updated information according to the registrations effected by the 42's trade register offices by Courts, maximum promptness to opening the access code, friendly user database interface and fair fees. Regarding the fees of access to Recom
Online, by Government Decision no. 1422/11.10.2006, in consideration of connection with the cheaper administrative expenses implied by this system, those were reduced to approximately 50%.
We are currently implementing a system of receiving on-line requests of registration, using electronic forms and electronic signature. This system will be fully functional next year.
Note for Slovenia:
* online registration for companies will be available after Nov. 11th. 2007, registration of sole proprietors is available since Jul. 1st. 2005
Note for Slovakia:
1
starting on 08/01/2007
* For all e-BR services - one paper step is needed to associate the user ID with his e-signature - e-signature can be used afterwards for all e-BR services without any further in-person or in-paper steps. Nevertheless, since other public registries do not provide their services online in legally binding form (e.g. Trade Register), in communication with those
registries in-person or in-paper steps are needed.
** Historical data are in general viewable only back to 1990´s, even though one can find data also back to 1950´s
*** only as regards shares (other property shall be pledged via Notarial Liens Register)
**** As from 1/08/07 but not for the purposes of extracts (these are available also for anonym users, and from 1/08/07 they will be available for anonym users as true copies)
***** True copies – 0,4$ per extract or per document , Registration: Plc. – 500$, Other legal entity or branch – 200 $, Entrepreneur – 100$, Changes in registered data – 40$ , Not legally binding extracts (from 2001) – 0$ (available online at www.orsr.sk)
53
Estonia Great Britain Hungary Ireland Latvia Lithuania Norway Romania Slovak Republic Slovenia
Advanced e-BR functionality Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year Yes No Year
22. Is information on a firm’s legal court-sanctioned bankruptcy available
online through the e-BR (for example through automatic links with a relevant X (only
database)? information
pursuant to Art.
2(h) of Dir.
X X X X X X X 1968/151/ EEC X
23. Is information on independent or registrar-issued credit ratings
available online through the e-BR (for example through automatic links with
a relevant database)? X X X X X X X X X X
24. Is the e-BR part of the country’s official e-Government vision and
framework, such as being included in the government’s e-Government
Strategy or Policy? X X X X X X X X X X
25. Is the e-BR interoperable and interlinked with a credit-rating system?
X X X X X X X X X X
26. Is the e-BR interoperable and interlinked with an e-procurement system
for government agencies? X (planned
X X X X X in 2008) X X X X
27. Is the e-BR interoperable and interlinked with a land registry? X X X X X X X X X X
28. Is the e-BR interoperable and interlinked with a Pledges registry?
X X X X X X X X X X
29. Is the e-BR interoperable and interlinked with a Trade database? X, no
separate
X X X X X X Trade DB NA X Partially X
30. Is the e-BR interoperable and interlinked with a social security or labor
registry? X X X X X X X X X X
31. Is the e-BR interoperable and interlinked with a Tax registry or BR
database? provides
data to tax X1
X X X X X X registry X X (Partially) X
32. Is the e-BR interoperable and interlinked with a citizens’ registry?
X X X X X X X X X X
33. Does the e-BR offer automatic tracking of firms of interest (Favorites) to
users? X X X X X X X X X X
34. Does the e-BR offer automatic news feeds about the firm being
viewed? X X (limited) X X X X X X X X
35. Can firms enter or upload their annual accounts information online?
X X X X X X X X X1 X
a. If yes, can firms enter the data field by field, or send a Submision of
file from which data fields can be read or manipulated (e.g. Special XML data
Excel)? (Please answer “No” if scanned image-only file as well as
documents are uploaded) explanatory
notes, audit
report in pdf.,
doc, onen office
X X X formats X X X
b. In what year was this functionality implemented?
2002 2006 2006 2007 2002
36. Are analysis and aggregation of annual accounts data (by industry,
region, sector, profitability or for the entire country) available through the e-
BR site? x* X X X X X X X X X
54
II. Business registry reform, indicators, and success Estonia Great Britain Hungary Ireland Latvia Lithuania Norway Romania Slovak Republic Slovenia
Results Indicators No responses given No responses given No responses given No responses given
Efficiency of e-BR reform
(a) The average processing time for a typical transaction before
implementing the online platform was: 5 days 5 working days a few seconds 5 days 5 days
(b) The average processing time for a typical transaction using the online
platform is: 2-3 days 4 hours approximately a few seconds 1 day -
(c)The processing time for a rush-order transaction using the online platform
is: 2h As above a few seconds 1 hour -
(d) After the implementation of the online platforms, the number of annual
transactions went from (number) in (year) to (number) in (year) 100 annual reports in year
2002 to 3200 annual About 42,000,000 page
reports in year, 2006. To hits/month on our website
early to comment on the includes filing and
entry petitions. accessing of information -
(e) Have online transactions overtaken paper-based transactions in volume Yes looking at the total of
and if so, how many years after the implementation of the online platform Online transactions have all activities but no record
did this occur? not yet overtaken paper- of exactly when this
based transactions occurred No Yes, 1988 -
Cost savings of e-BR reform:
(d) The investment cost for implementing the online platform for the Only public investment:
business registry is/was (please indicate currency) Approx. 1,3 milj. EUR 600 000 LVL 12MNOK (1987) 2.000.000 $
(i) The public investment portion of the cost is/was: (public investment only) None
(ii) The private investment portion of the cost is/was
(g) The annual savings of moving business registry transactions from paper
to an online platform are: (if exact figures are not available, please provide
an estimate and indicate currency) It can be said in 2-3 years Not calculated
(i) For the registry i) ?
(ii) For firms
ii) in general - fees are set at
½ of the “paper” fees
Transparency of an e-BR:
(h) Was lack of transparency and accountability a problem before
automating and moving the business registry online? No YES Yes no Yes
(i) Is lack of transparency and accountability a problem after automating and
moving the business registry online? No YES No No No
55
Acronyms
ADR Alternative Dispute Resolution
B2G Business-to-Government
BOO Build-Own-Operate
BOOT Build-Own-Operate-Transfer
BOT Build-Operate-Transfer
BRITE Business Register Interoperability Throughout Europe
C2G Citizen-to-Government
CIP Critical Infrastructure Protection
DBFO Design-Building-Finance-Operate
DCA21 e-Governance program under the Indian Ministry of
Company Affairs
e-BR Electronic Business Registry
ECA Europe and Central Asia
EU European Union
G2B Government-to-Business
G2C Government-to-Citizen
G2G Government-to-Government
IT Information Technology
M&E Monitoring and Evaluation
OECD Organization for Economic Co-operation and Development
PKI Public/private Key Infrastructure
PPP Public Private Partnership
SME Small and Medium Sized Enterprises
TA Technical Assistance
UNCITRAL United Nations Commission on International Trade Law
VAT Value Added Tax
56
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