Legislative Guide on Key Principles of a Business Registry
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The UNCITRAL guide aims to reduce legal obstacles for micro, small, and medium-sized enterprises (MSMEs) by promoting efficient business registration while facilitating compliance with jurisdictional requirements. It provides best practices, legislative recommendations, and encourages transparency and accessibility in business registries. The reform process is suggested to be phased, ensuring that local economic and legal contexts are considered to support ongoing improvements.
Legislative Guide on Key Principles of a Business Registry
- 1. UNCITRAL United Nations Commission on International Trade Law Legislative Guide on Key Principles of a Business Registry Monica Canafoglia Legal Officer ITLD/UNOLA
- 2. UNCITRAL United Nations Commission on International Trade Law Who prepared the Guide? 2013 Mandate to WG I to work on reducing the legal obstacles encountered by MSMEs throughout their life-cycle Beginning of the life cycle: - Business registration - Simplified incorporation Initial FocusSources of the Guide WB Group, IMF, UNCTAD, UNDP, UNIDO, IGOs, NGOs, regional organisations, regional and domestic examples All UN Member States invited as well as UN agencies, in addition selected IGOs and NGOs. Working Group
- 3. UNCITRAL United Nations Commission on International Trade Law • Compilation of best practices • - Commentary reflecting practices and steps for optimal approach • - Legislative recommendations A LEGISLATIVE GUIDE IS… • “We already have legislation!” • Aspirational for all economies in all stages of development • Available in the 6 UN languages WHO NEEDS IT?
- 4. UNCITRAL United Nations Commission on International Trade Law ‒ To facilitate the creation of a sound business environment through businesses operating in the formal economy ‒ To facilitate efficient domestic business registration as well as cross-border access to registries through cooperation among registries in different national jurisdictions Note: The guide recognizes that the operation of a business in the formal economy requires compliance with the requirements of the jurisdiction, which may not require registration with a business registry. The guide does not seek to create any obligation or implication on States to alter existing legislation or add addition requirements for registration The Guide | Purpose *©New York Convention Guide Project 2016
- 5. UNCITRAL United Nations Commission on International Trade Law Purpose: - Provide to a business an identity recognized by the State - Receive, store and make information on the registered business available to the public 1 Simple and predictable system of laws permitting registration2 Key Features of a business registry: ‒ Publicly accessible, simple, user friendly and time- and cost- efficient ‒ Registration procedures suited to the needs of MSMEs ‒ Business information is easily searchable and retrievable ‒ Registry system and information of good quality and periodically updated 3 Objectives of a business registry *©New York Convention Guide Project 2016
- 6. UNCITRAL United Nations Commission on International Trade Law Responsible authorityA Establishment and functions of the business registry *©New York Convention Guide Project 2016 B C F D G E Appointment and accountability of the registrar Transparency in the operation of the business registry Use of standard registration forms Capacity-building for registry staff Core functions of business registries Storage of information and access to it throughout the business registry
- 7. UNCITRAL United Nations Commission on International Trade Law Transparency Laws: Should allow for simplified process of registration and make registration easily accessible for registrants Service Standards: Define the services to which users are antitled and may expect to receive Recommendation 7: “The law should ensure that the rules, procedures and service standards that are developed for the operation of the business registry are made public to ensure transparency of the registration procedures. ” Transparency in registration: - States should determine the moment at which the registration or any subsequent change made to it is effective - States should ensure that the registry collects, maintains and discloses the information on the business in a transparent way *©New York Convention Guide Project 2016 Transparency
- 8. UNCITRAL United Nations Commission on International Trade Law *©New York Convention Guide Project 2016 Operation of the business registry Reform of business registry Simplifying registration One-stop- shop Use of technology Inter- connection of authorities
- 9. UNCITRAL United Nations Commission on International Trade Law A one-stop-shop for business registration • Registration with multiple authorities • Additional services (e.g. licenses) • Physical premises • Electronic platforms SCOPE & FORMS • One P.A, with oversight of the integrated interface • Ideally, no changes in laws required • How to finance the OSS? INSTITUTIONAL ARRANGEMENTS
- 10. UNCITRAL United Nations Commission on International Trade Law Allocation of unique identifiersI Implementation of unique identifiersII Use of unique identifiers *©New York Convention Guide Project 2016 III Cross-border exchange of information among business registries
- 11. UNCITRAL United Nations Commission on International Trade Law Accessibility of information on how to register Scope of examination by the registry 6541 Business permitted or required to register Language in which information is to be submitted 8 Registration of a business *©New York Convention Guide Project 2016 72 Notice of registration and content of notice of registration Time and effectiveness of registration Period of effectiveness of registration 3 Minimum information to register
- 12. UNCITRAL United Nations Commission on International Trade Law 1. Errors in the application When the information provided by the business is not sufficient, the registrar should be granted the authority to request additional information to finalize the registration process. 2. Failure to meet the requirements prescribed by law Registries should reject the registration of a business only if its application does not meet the requirements prescribed by the applicable law of the State. Rejection of an application for registration
- 13. UNCITRAL United Nations Commission on International Trade Law Public access to information Access to registration - Easy access to registration services for all potential registrants - Easily retrievable information on the registration process, including: • List of steps in registration • Contacts list • Method of lodging complaints • Possible legal recourse • Advantages of one-stop-shop • Relevant fees Article 1(2) and (3) Exceptions •Personal, family, inheritance and employment matters •Settlements enforceable as a judgment or as an arbitral award (*) Access to information - Dependable and consistent hours that are compatible with the needs of the users - Access to registration services without discrimination - Availability of all public information on a registered business - Direct electronic access
- 14. UNCITRAL United Nations Commission on International Trade Law • Language • Lack of gender-neutral framework • Fees • Lengthy/complex procedures Barriers to registration • Special software required • Limiting search criteria • Fees • Language • Cross-border access to publicly available information Barriers to accessing information Barriers in business registry frameworks
- 15. UNCITRAL United Nations Commission on International Trade Law Updating information ‒ Information required after registration • Obligation to inform registry of any changes occurring in the business or amendment in the initial information ‒ Maintaining a current registry • Registry must ensure that the registered information is kept current (various approaches suggested) • The law should establish when changes to the registered information are effective
- 16. UNCITRAL United Nations Commission on International Trade Law Fees charged for business registry services Fees charged for information Publication of fee amounts and methods of payment Electronic payments Fees *©New York Convention Guide Project 2016
- 17. UNCITRAL United Nations Commission on International Trade Law Fees of business registry services Fees calculated on the basis of revenue needed to achieve cost recovery for setting up and funding the registry. Principle of Cost-Recovery
- 18. UNCITRAL United Nations Commission on International Trade Law Registrant: Liability and Sanctions Misleading, false or deceptive information Sanctions Liability for information that is submitted to the registry upon registration or amendment or for failure to submit information Appropriate sanctions to be imposed on businesses for breach of its obligations to submit information to the registry
- 19. UNCITRAL United Nations Commission on International Trade Law Registry: Liability Liability of the business registry Liability of the business registry • No provision of legal advice by staff • Mitigation measures (e.g. audit mechanisms) • Compensation to users Liability for loss or damage caused by error or negligence of the registry
- 20. UNCITRAL United Nations Commission on International Trade Law De-registration Voluntary deregistration - Conditions must be specified by the law - Registrar must deregistered a business if those conditions are met - Simplified procedures for MSME deregistration should be permitted Involuntary deregistration Conditions must be specified by the law - Public details of a deregistered business should remain visible, but the status of the business should be changed - The law should specify when deregistration is effective and its legal effects
- 21. UNCITRAL United Nations Commission on International Trade Law Recommendation 52: The law should provide that information submitted should be preserved by the registry to enable it to be retrieved by interested users Preservation of records
- 22. UNCITRAL United Nations Commission on International Trade Law The reform process The need for reform Assess the current economic, legal and social situation of the State. The approach will be influenced by those elements Success in a pilot stage can have a strong demonstration effect, and is likely to build support for continued reform Phased reform process Changes to underlying laws Business registration reform can entail amending different aspects of the law of a State Ensuring domestic circumstances are amenable to reform, that incentives for reform exist and that there is support for reform The reform catalysts
- 23. UNCITRAL United Nations Commission on International Trade Law Thank you!