Private company information outside the U.S.: Western Europe, UK and Ireland
Jinfo Blog

By Heidi Longaberger

Abstract

The availability of data about private companies, particularly in jurisdictions where minimal or no reporting is required by law, can be challenging to obtain. Bureau van Dijk provided FreePint with fresh awareness of what is available and how to access it. The information was so useful, we commissioned two articles for FreePint readers on the topic. This article examines sources of information on private companies... even when you think such information might not be available.

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As just about anyone who has been in business eventually discovers, finding U.S. private company information, especially financial information, can be difficult at best. Most U.S. private companies are not required to file financial data at all, so public access is rare. Many U.S. companies never discuss their balance sheet outside of their boardrooms. Often, the employees don’t even know the numbers. Databases that claim to specialise in U.S. private company information run up against the same problems that the individual searcher encounters, which is finding accurate data. These information providers will sometimes estimate a company’s revenue or sales based on a number of variables, such as size and industry. Yet trying to place every company into an estimate can also drastically misrepresent reality.

However, in many other world regions, private company data must not only be filed with the appropriate regulatory body, but it is made available to the public as well. As a generalisation, because there are national differences, European private companies often report balance sheets, director details, profit and loss, and cash-flow statements. In this article, the details of publically available private company data in several Western European countries, the United Kingdom and Ireland will be highlighted.

Historically, there are two schools of thought which affect financial reporting.For the Netherlands, Denmark, UK and Ireland, part of the “Anglo-Saxon” group of countries, the goal is to provide existing or potential shareholders with a true and fair view of the company. Continental Europe is more focused on providing information for taxation and statistics, and to offer protection to credit grantors. Other factors affecting a country’s filing regulations and disparate display of financial information include:

• Economics – Fiscal policies, accounting rules, taxation

• Cultural difference – Some cultures do not adhere to the importance of deadlines or regulation

• Legal form of the company - Sole proprietorship, partnership, limited liability etc.

• Company size – small and medium size companies may be required to file less information

One example of how fiscal policy affects filing is the taxation on profit requirement. For most of Continental Europe, companies tend to lower their profit with overestimated depreciation or bad debt provisions. This calculation of the fiscal profit is based on accounting rules. Yet in Anglo-Saxon countries, the taxation on profit is calculated separately and is independent from accounting practices. The difference between both calculation methods is itemised in “deferred taxation”, which is considered a debt on the balance sheet. The view of the profit and loss account is considered to be fair, as accounting and taxation are separated.

The following matrix highlights the regulatory bodies, financial reporting requirement, and resources for accessing private company information in the U.S., UK and parts of Western Europe.

United States: A private company registers in the state in which it is incorporated. This registration requires no financial reporting. Also, even if a private company’s financial statement were somehow made available, it is often not in the standard public company format that many are used to understanding. There are a very few instances when a private company may file a report with the SEC:

• Debt – A private company that trades debt on an exchange, or if debt was issued on a registration statement and is held by more than 500 holders of record.

• Bonds – A private company that has sold bonds or notes as part of a contract sale and the buyer said the company must file with the SEC until the bonds are retired.

Regularly filed forms include under these situations may include the 10-K, 10-Q, 8-K and 4, as well as prospectuses. But again, these circumstances are not common.

Germany: Company size generally dictates where a company files its accounts. Large enterprises file at the Bundesanzeiger (Federal Gazette), small and medium sized companies file at one of 400 Handelsregisters, or register courts, as there is no central register. Private limited companies (GmbH) are required to file annual financial statements. However, the structure of German accounts was historically produced solely for taxation purposes, not for any other interested parties. The environment is such that few private companies file, and failure to file is rarely punished.

There is the centralised portal to access private limited company information, and reports can be downloaded starting at €4.50.

UK: Annual requirements for UK private companies are filed with Companies House. Company reports can be accessed through their WebCheck product for a minimal fees starting at £1 for documents, including accounts and annual return reports. An index of over 2 million companies is free. Full accounts, including a profit & loss account, a balance sheet, and auditors and directors reports are held for all large companies. Smaller companies do not file a profit and loss statement. The Companies Act of 2006 describes UK company regulations.

Italy: There is a majority of small and medium sized businesses, and larger limited private companies with turnover greater than € 1 million are required to provide financial data. These reports are available through the Italian Chambers of Commerce Companies Register site. Registration is free, and report prices are minimal. Be advised that company reports and financial statements of the Italian Companies Register are currently in Italian, but the search company forms and deeds in European registers are in English.

France: State regulation is significant and filing is well regulated and standardised.All limited (SarL) and large private companies (SA) are required to file standardised accounts at thecommercial court within the region that a particular company is operating. In total, approximately 1.4 million companies file accounts (including public companies). Accounts are then available from the courts, or the court then filesat theInstitut National de la Propriete Industrielle. Reports can be downloaded from a database that is administered by an outside company called Coface ORT.Accounts can be downloaded from the ORT site at the cost of a few euros. The format is different for UK and US accounts, with figures entered onto a standard form in French.

Spain: All private companies (SL) are required to file accounts, but reportedly up to 80% do not. Small to medium sized companies file only a balance sheet, an income statement or profit and loss account (as it is known in the United Kingdom), a report on changes in the shareholders' equity and notes.

Basic information about a Spanish company, including the company's tax ID, the director's name, and the location of the physical office is available through Registro Mercantil. Detailed company information can be obtained via a certificate by going in person to the Mercantile Registry of the province where the company is registered.

Netherlands: All limited companies (B.V.s and N.V.s) and some sole traders and cooperations must file, which is approximately 680,000 companies. There is a high compliance rate to filing, at 90% of companies. As in the UK, small companies are not obliged to file profit and loss accounts. An additional delay of five months is permitted by law for filing. All companies file with one of the 11 regional Chambers of Commerce,where online access to the annual account of a company costs € 2.90 via a centralised trade registry of the Netherlands Chamber of Commerce. Navigation and reports are in Dutch only.Historically, accounting practices were heavily influenced by Anglo-Saxon systems and subsequently the recent application of 4th and 7th EU directives. Both cultures have influenced the current situation in The Netherlands with the result that the accounts are in a format that is a combination of the two.

Belgium: All companies, including limited private companies (BVBA/SPRL), are required to file accounts with the National Bank. Reporting rrequirements depend on many factors, including company size, type and turnover.Accounts must be filed within six months following the end of the accounting year. Access to company records and accounts is available on the National bank site free of charge.

Austria: Financial statements must be provided annually and must disclose all assets, provisions, liabilities, prepayments, income and expenses. They must give a ‘true and fair’ view of a company’s assets, its financial condition and earnings. A report of the executive board covering the situation of the company during the previous year and in the foreseeable future must be drafted by medium-size and large corporations. There is a database, the Firmenbuch, which provides company documents for a minimal cost.

Ireland: Every company is required by law to file an annual return with the Companies Registration office (CRO) once every financial year. The information given in filed accounts varies with the size of the company. Accounts must be filed with the annual return (information about the company and its' directors). Accounts can be obtained online through the CRO for around €2.50.

The ease of obtaining private company information from the UK, Ireland and Western Europe does vary by some factors. However, financial information is far and away more readily available to the worldwide public than it is of private companies registered in the United States.

Other Resources: centralised resources for business registration, regulations and company information in Europe:

• European Business Register

• ICAEW Knowledge Guide to International Company Registrations

• GBR Direct

• Doing Business

• Bureau van Dijk

• Kanton St. Gallen

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