71 % of companies in default on information obligations

January 26, 2016
71 % OF COMPANIES IN DEFAULT ON INFORMATION
OBLIGATIONS 2014
News from Bisnode
Seventy-one percent of Czech companies have not yet met their reporting duties for 2014. The basic
legal deadline for filing financial statements in the collection of documents expired at the end of July
2015, and the ultimate deadline expired at the end of last year. The worst situation prevails in Prague
and among firms with zero or low sales. Financial brokerage and retail trade companies exercise the
worst discipline. The consulting company Bisnode, which provides economic information about
firms, has released its analysis today.
More than half of companies have long been in arrays on their duty to provide information. “The nonfulfilment of legally set rules on the one hand, and the non-enforcement of applicable laws on the other, is
negatively perceived from the vantage point of transparency of the business environment,” Bisnode analyst
Petra Štěpánová says of the statistics, as she explains that this trend brings along a plethora of adverse
phenomena, such as expanding room for corruption and unearned competitive advantages for the
companies that breach the law.
“It is opportune to enforce a rule due to which the companies in default on their information duty would not be
able to win a public procurement contract or public funding,” says Janusz Konieczny, analyst of the
Anticorruption Endowment (NFPK), as he explains: “Solutions could be also found in the introduction of
significantly stronger law enforcement measures. Register courts should employ sanction mechanisms or
even start proceedings to wind up a company in liquidation. While, however, the Regional Court in Brno has
exercised a relatively good diligence and meted out 723 disciplinary fines in the period from 1 Jan 2014 to 31
March 2015, the Prague City Court meted out only 280 fines in the same period, even though Prague
registers more corporate entities and reports one of the highest counts of information duty default. For its
part, the Regional Court in Ostrava was not able to even say how many fines it had meted out.” “If the State
started to systematically enforce the collection of fines for the failure to meet the information obligation, it
could collect, according to the information we have, at least 13.7 billion crowns, in addition to almost 256.3
billion crowns’ worth of additional income for the national budget,” notes Petra Štěpánová of Bisnode.
To this date, more than 71 percent of companies have been in default on their information duty for 2014, and
over 61 percent in case of 2013. In terms of legal form this legal obligation has been fulfilled more reliably by
joint stock companies, rather than PLCs.
Meeting information obligations in 2010 – 2014*
Percentage of
default 2014
Joint stock company
59.71%
Percentage of
default 2013
42.71%
PLC
71.97%
62.47%
58.93%
57.37%
57.19%
Total
71.21%
61.20%
57.43%
55.83%
55.64%
Legal status
Percentage of
default 2012
36.60%
Percentage of
default 2011
35.21%
Percentage of
default 2010
35.41%
Source: Bisnode (*data as at 10 Jan 2016)
O Bisnode
Bisnode umožňuje přijímat správná a chytrá rozhodnutí. Data a informace snadno měníme na komplexní poznatky, které firmám po celé
Evropě usnadňují fungování jak ve strategických, tak i každodenních otázkách. Na 17 evropských trzích máme 2 500 zaměstnanců a
prostřednictvím partnerství s Dun & Bradstreet poskytujeme globální řešení založená na informacích o více než 240 milionech firem
z celého světa. Více na www.bisnode.cz
The higher sales the more dependable discharge of the information duty
Absolutely the worst approach to the observance of applicable legal standards has been displayed by the
companies which report no sales, according to the Czech Statistical Office (ČSÚ). In this category, almost 87
% of companies have thus far failed to meet their reporting duties. “We often deal with dead mailboxes with
no business activities demonstrated,” explains Petra Štěpánová from Bisnode. Conversely, the best
approach to the disclosure of financial statements has been displayed by companies with annual sales in
excess of CZK 1 billion. “Although 27 % of concerns failed to report for 2014, the number was down to seven
percent in 2013, and less than five percent in 2010-2012,” adds the Bisnode analyst, who explains the
conventional wisdom that the growth of sales is directly proportionate to the share of reporting companies.
Meeting information obligations in 2010 – 2014* according to sales
Sales category
Percentage of
default 2014
N/A
CZK 1- 9,999,999
86.70%
Percentage of
default 2013
85.36%
Percentage of
default 2012
84.22%
Percentage of
default 2011
83.11%
Percentage of
default 2010
82.46%
63.18%
50.00%
44.68%
41.73%
40.66%
CZK 10,000,000 – 99,000,000
51.64%
34.13%
27.77%
24.09%
22.82%
CZK 100,000 000 – 999, 999, 999
37.71%
18.00%
13.26%
10.23%
9.52%
CZK 1,000, 000, 000 and more
27.03%
7.28%
4.75%
4.21%
3.81%
Source: Bisnode 10 Jan 2016 (*data as at 10 Jan 2016)
More than 76 % of Prague companies fail to provide information
Companies with Prague seat registration have long displayed the biggest default on their information duty. In
2014, more than a quarter of all companies registered in Prague failed to disclose their economic
performance data. “Business in the Czech Republic eyes big cities. Prague is the registered address of more
than 40 % of Czech companies. Big cities attract business by offering bigger market opportunities and bigger
prestige and wider business opportunities. But negative phenomena crop up as well: Prague registers the
highest count of unreliable VAT payers; Prague is seen as a tax haven in terms of the frequency of taxman
visits and when companies move in from other places, they instantly report profitability drops, most likely due
to ‘creative’ book-keeping,” notes Bisnode analyst Petra Štěpánová.
Meeting information obligations in 2010 – 2014* according to company address
Region
Percentage of
default 2014
58.51%
Percentage of
default 2013
49.01%
Percentage of
default 2012
43.40%
Percentage of
default 2011
44.37%
Percentage of
default 2010
45.78%
South Moravia
69.76%
60.85%
57.60%
54.86%
54.17%
Karlovarský kraj
68.19%
56.80%
54.18%
52.71%
53.32%
Hradec Králové
48.98%
32.40%
24.62%
24.16%
25.30%
Liberec
66.99%
59.07%
56.43%
53.91%
52.74%
Moravia-Silesia
68.19%
57.23%
54.18%
52.23%
50.97%
Olomouc
71.17%
60.86%
57.20%
54.92%
54.70%
Pardubice
59.11%
51.08%
46.17%
43.59%
43.21%
South Bohemia
Plzeň
71.13%
58.58%
54.80%
54.19%
54.27%
Prague
76.74%
67.14%
63.40%
62.03%
62.02%
Central Bohemia
72.58%
63.02%
59.79%
59.15%
59.86%
Ústí nad Labem
66.64%
57.72%
54.48%
52.67%
51.85%
Vysočina
57.60%
44.55%
42.01%
40.99%
42.96%
Zlín
68.24%
58.29%
55.42%
52.61%
51.12%
Source: Bisnode 10 Jan 2016 (*data as at 10 Jan 2016)
O Bisnode
Bisnode umožňuje přijímat správná a chytrá rozhodnutí. Data a informace snadno měníme na komplexní poznatky, které firmám po celé
Evropě usnadňují fungování jak ve strategických, tak i každodenních otázkách. Na 17 evropských trzích máme 2 500 zaměstnanců a
prostřednictvím partnerství s Dun & Bradstreet poskytujeme globální řešení založená na informacích o více než 240 milionech firem
z celého světa. Více na www.bisnode.cz
In six segments of enterprise, the share of companies in default of their information duty exceeded
90 %
Other financial intermediation is the area of business where more than 96 percent of enterprises have not yet
met their disclosure duties. In the retail foods, drinks and tobacco product area, more than 92 percent of
companies have yet to submit their financial statements. The 90-percent score of defaulting on the
information obligation also currently encompasses activities associated with employment, cleaning services
and wholesale business with foods, beverages and tobacco products.
Worst offenses in 2014 reporting duties according to the area of business
Sphere of business
Other financial brokerage
Foods, beverages and tobacco products retail in selected shops
Percentage of default
2014
95.69%
92.14%
Employment-related activities
91.60%
Cleaning and maintenance
90.53%
Wholesale business in foods, drinks and tobacco products
90.50%
Travel agencies and travel bureaus
89.20%
Distribution of films, video recordings and TV programmes, provision of audio recordings
89.17%
Other retail trade in general stores
88.38%
Manufacture of machines and equipment for general purposes
88.03%
Wholesale trade in predominantly household products
87.73%
Source: Bisnode (*data as at 10 Jan 2016), only fields where at least 100 companies do business
For further information contact:
Petra Štěpánová, PR Director
Mobile: +420 606 744 909
E-mail: [email protected]
Janusz Konieczny, NFPK analyst
Mobile: +420 604 270 132
E-mail: [email protected]
O Bisnode
Bisnode umožňuje přijímat správná a chytrá rozhodnutí. Data a informace snadno měníme na komplexní poznatky, které firmám po celé
Evropě usnadňují fungování jak ve strategických, tak i každodenních otázkách. Na 17 evropských trzích máme 2 500 zaměstnanců a
prostřednictvím partnerství s Dun & Bradstreet poskytujeme globální řešení založená na informacích o více než 240 milionech firem
z celého světa. Více na www.bisnode.cz