business registration, part 2

Copyright 2010, The World Bank Group. All Rights Reserved.

Business registration, part 2Administrative and statistical business

registers

1

Business statistics and registers


Enterprises• An institutional unit in its capacity as a producer of goods

and services is known as an enterprise• An enterprise is an economic actor with autonomy in

respect of financial and investment decision-making, and allocating resources for the production of goods and services– It may be engaged in one or more productive activities– The enterprise is the level

of statistical unit at which allinformation is maintained relating to its transactions, including financial and balance-sheet accounts

2


Establishments• An establishment is defined as an enterprise or part of an enterprise

that is situated in a single location and with one single productive activity

• The International Standard Classification of All Economic Activities (ISIC) is designed for grouping units with similar activities

• Establishments with the same principal activity are industries• Industries may be heterogeneous when enterprises have secondary

activities that are different from their principal activities• An establishment may have one or more secondary activities

– If a secondary activity is important, the unit involved is a local unit• In the case of most small and medium-sized businesses, the enterprise

and the establishment are identical

3


Other statistical units• The concept of the establishment combines activity and location• When precision in activity and location is not required other types

of units may be constructed for statistical purposes: Kind-of-activity units are enterprise or part of enterprises engaged in

only one kind of activity, regardless of location Local units are enterprises or part of enterprises active at or from one

location, regardless of kind of activity Units of homogeneous production are analytical units used for input-

output analysis; they perform only a single productive activity, regardless of location

• The enterprise group is a statistical unit used in situations where its constituent enterprises cannot provide the required financial information

4


Profiling large and complex entities

• In large and complex entities, the units of production are grouped hierarchically

• Management of the financial affairs of the business usually occurs at a higher organizational level than management of production

• The accounting systems of businesses usually reflect this management structure

• Accounts are maintained for the corresponding level of management responsibility

5


Profiling large and complex entities

• The legal structure of complex enterprises may not correspond with the management and accounting structure

• For defining the ‘statistical structure’ profiling is needed

• Profiling leads to the delineation of statistical units that may not coincide with the legal structure

6


Classification of economic activities

• Statistical units can be classified in a categorical system of economic activities

• The activity classification used is normally the ISIC or a national or regional variant thereof

• In the CBR all statistical units used to describe the production process are classified according to activity

• If units carry out more than one activity, they are classified according to their main activity

7


Structure of CBR

• The statistical units in the CBR get a unique identification code

• Relations with parent and sister enterprises should also be stored in the CBR

• Information about relationships is normally acquired from the parent company

• Ideally all actors in the economy must be registered• The CBR should also store size information as a

stratification variable

8


Place of the CBR in the NSO

• The CBR provides the sampling frame for sample surveys

• It is also the basis for grossing up results to produce population estimates

• CBR should be the frame for all enterprise surveys• Stand-alone registers for each individual survey lead to

uncoordinated statistics• The CBR should be managed by one single dedicated

organizational unit within the NSO

9


Data sources for CBR

• It is important to use all available sources of information to establish a comprehensive and up-to-date CBR

• In nearly all countries administrative sources exist• Administrative registrations of businesses may not provide

sufficient information• Proper statistical units must be formed• Relationships between units must be identified and stored• The transformation of administrative information into

statistical units is a stepwise process

10


Administrative data sources

• Administrative data sources vary from country to country

• Common examples include business registration systems, VAT tax systems, payroll tax systems, unemployment insurance administration systems etc.

• Careful review to determine their completeness, suitability and accuracy is needed

• The administrative data sources usually provide a list of legal entities

• Typically, they do not provide a list of enterprises broken down into establishments classified by activity

11


CBR updating strategy

• A set of instruments to update the register must be developed

• Optimal procedures depend on how information is received from administrative sources

• CBR staff have an important role to play• Supposedly new units must be checked against existing

units• Special attention must be paid on update-information

that may have a strong impact on statistical outcomes

12


CBR updating strategy

• Profiling large units must take place regularly• Feedback information from CBR-based statistical

surveys must continuously be used• Economic censuses or partial sector-oriented

censuses are recommended• Sample-based GBR-specific surveys should be carried

out yearly

13


Economic census• One way of establishing a CBR is by implementing an

economic census• Repeated economic censuses can contribute to

maintenance of the CBR• An economic census provides the most comprehensive

set of small-area data for establishing the frame of the universe of businesses

• However, economic censuses are so resource intensive that they can only be organized infrequently

• An economic census is not the proper instrument for keeping the CBR up to date

14


Formal and informal sector

• In most developing countries only a small number of entities are registered

• This can be seen as the ‘formal sector’• Unregistered entities are the informal sector• This definition makes the informal sector very big• Other criteria to delineate the informal sector may be

small size (>5 workers) or having no accounts• Some of these units may be registered or even pay

fees to local authorities

15

business registration, part 2

Documents