12Th Meeting of the International Roundtable on Business Survey Frames in Helsinki From

12Th Meeting of the International Roundtable on Business Survey Frames in Helsinki From

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Session No.7
Paper No.2
Country: Germany
Legal units with the character of "public undertaking"
in the German statistical business register
Heinz Schemmel
Federal Statistical Office
Federal Republic of Germany

1.The Council Regulation (EEC) No 2186/93 of 22 July 1993 on Communitycoordination in drawing up business registers for statistical purposes[1)] (in the following referred to as

register regulation) stipulates that the register entries for the individual legal units must

include the

character of "public undertaking" of the legal unit within the meaning of Commission Directive 80/723/EEC (Yes/No), where legal persons are concerned

(Annex II, No. 1, letter i). In the fifth "whereas" of the register regulation, it is explained that the important role played by public undertakings in the national economies of the Member States has been acknowledged, particularly in the Commission Directive mentioned earlier. Therefore they should be identified in business registers. In Article 2 of that Directive, such undertakings are defined.

2.In a justification of the selected characteristics in Annex II of the register regulation, the Commission agencies[2)] state that - from the aspect of the "institutional character" - the register regulation requires data which permit indirect coding of the institutional sub-groups; among other things, the character of a "public undertaking" is mentioned there.

2Defining public undertakings

3.The Commission Directive of 25 June 1980 on the transparency of financial relations

between the Member Statesand public undertakings (80/723/EEC)[3)] - in the following

referred to as transparency directive - stipulates that specific information must be

disclosed. In the sense of that directive (article 2), there are:
-public sector:
general government and other public authorities;

-public undertaking:
any undertaking on which the public sektor can exert directly or indirectly a controlling influence by means of ownership, financial participation, statutes or other provisions governing the undertaking's activity.

4.It is assumed that a controlling influence is exerted if the public sector directly or indirectly:

a)owns the majority of enterprise's subscribed capital or

b)has the majority of the voting rights connected with the shares in the enterprise or

c)can appoint more than half of the members of the enterprise's administrative, governing, or supervisory body.

5.In the "whereases" of the directive, it is explained that the public sector may exert a

controlling influence on the behaviour of public undertakings also because of the powers it has in the administrative, governing, or supervisory bodies. These may be based on statutes or on the distribution of shares.

6.The transparency directive is not to be applied to the financial relations between the public sector and public undertakings with a turnover of less than 40 million ECU or with a balance sheet total of less than 800 million ECU in the case of public credit institutions. It would have to be checked whether these cut-off thresholds are applicable also to the enterprises to be identified as "public undertakings" in the business register.

7.The transparency directive does not explain what indirect control really is. This might refer to the control over another publicly controlled enterprise, or to the control by another public unit which is not an enterprise.

8.The transparency directive is to be applied to "enterprises". For two reasons, this can only refer to legal units: First, financial relations of the public sector can exist with legal units only and, second, the regulation on statistical units, giving a definition of the enterprise as a statistical unit, did not yet exist when the directive entered into force.

9.In Germany, the statistical coverage of public undertakings is governed by the Law on the Statistics of Public Finance and Public Service Personnel (Finance and Personnel Statistics Law - FPStatG) of 21 December 1992[4)]. According to that law, government and municipal funds, institutions, and business enterprises with a legally independent form are to be included by specific surveys if the legal persons mentioned later have a direct or indirect participation (through other public institutions or enterprises) of more than 50 percent of the nominal capital or of the voting rights:

1.the federal government,

2.the Länder,

3.the communities and local authority associations,

4.the special-purpose associations and other legal persons of inter-community cooperation if they perform community tasks in place of community authorities.

10.Therefore, the direct and indirect participations of the mentioned public authorities have to be determined.

11.Budgetary legal provisions stipulate that federal and Länder governments should acquire a participation in existing enterprises with a private legal form only if they obtain an appropriate influence in the supervisory board or a similar supervisory body. So, it may be assumed that the condition according to letter c in article 2 of the transparency directive is fulfilled if there is a public participation in an enterprise.

3Collecting, storing, and updating information on public undertakings and their owners in the German statistical system

12.Information on public undertakings and their owners is obtained from sources that are accessible to the general public and through surveys. The data are stored and updated in a databank. That databank is maintained by the Federal Statistical Office and the statistical offices of the Länder, the software and contents being identical.

3.1Defining the participation of public authorities in enterprises

13.There is a direct participation of public authorities in an enterprise if one or several public authorities own shares of that enterprise. There is a direct public majority participation if one or several public authorities own a total of more than 50% of the shares or voting rights of the enterprise concerned. Such an enterprise is referred to as a directly publicly controlled enterprise.

14.There is an indirect participation of public authorities in an enterprise if a directly publicly controlled enterprise owns shares of another enterprise. There is an indirect public majority participation if the directly publicly controlled enterprise owns more than 50% of the shares or voting rights of the other enterprise. That other enterprise is referred to as an indirectly publicly controlled enterprise.

15.Chart 1 shows the relations between public authorities and the enterprises in which such public authorities have a direct or indirect participation. Generally, publicly controlled decisions can be taken only by enterprises which are publicly controlled themselves. Consequently, only a publicly controlled enterprise can have indirect public control (possibly together with other owners) over another enterprise. In this case, the extent of indirect public control corresponds to the entire participation of the first enterprise in the second one. It is not weighted with the total of public shares in the controlling enterprise.

16.If, in turn, an indirectly publicly controlled enterprise has a participation in another enterprise, this is an indirect public participation again. If that indirect public participation alone - or together with other direct or indirect public participations - exceeds 50%, that second enterprise also operates as an indirectly publicly controlled enterprise. If, for example, direct public participations in an enterprise A do not form a public majority, participations of that enterprise A in other enterprises cannot be used to calculate indirect public majorities. If, however, further information about participations of indirectly publicly controlled owners of enterprise A shows that the total public participation exceeds 50%, enterprise A is considered an indirectly publicly controlled enterprise. Consequently, all its participations in other enterprises have to be taken into account when examining whether other enterprises are publicly controlled.

3.2Survey of direct participations of public authorities in enterprises

17.Generally accessible sources are used to obtain those enterprises in which public authorities have a direct participation. If for any of those enterprises not all owners are known, it is asked in a specific survey (basic survey) for information on its shareholders and their shares in the subscribed capital and in the voting rights. That survey provides, first of all, detailed and complete information on direct public owners (general govern-ment and other public authorities) and on other shareholding enterprises (see chart 2).

3.3Surveys of indirect participations of public authorities in enterprises

18.Through the basic survey mentioned before, enterprises have been identified in which public owners - alone or together - have a direct majority participation. Also, other enterprises have been covered as owners, although it was not clear at that time whether they are publicly controlled.

19.Through a subsequent survey covering the participations of previously obtained publicly controlled enterprises (participation survey), indirect public participations in enterprises become obvious.

20.A second basic survey is conducted following the participation survey and covering the owners of those enterprises which were obtained through the participation survey. Thus, the group of indirectly publicly controlled enterprises will be enlarged. That second basic survey covers only those enterprises for which not all owners are known yet.

21.The information obtained from the second basic survey will possibly necessitate a second participation survey. That cycle of determining indirect public participations will have to be continued until no further publicly controlled enterprises are obtained from the information gathered.

3.4Setting up a databank of public undertakings and their owners

22.That databank is maintained on personal computers by means of the ACCESS database software. It consists of
-the file of units
(public authorities as owners; enterprises as owners;
enterprises in which there is a participation),
-the file of participations.
Developing the databank has not been finished yet.

23.The information obtained from the surveys of enterprise owners and the surveys of participations of publicly controlled enterprises are transferred to two data files: data on units are stored in the units file, while data on shares are stored in the participations file.

24.The units file contains the following characteristics for any unit:
-identity number of the unit,
-name or designation,
-legal form,
-activity code,
-code of the geographical location,
-ownership status of the unit
-codes of the statistics for which the unit provides information.

25.The participations file contains the following characteristics for any enterprise and for any owner of that enterprise:
-identity number of the unit (from the units file),
-identity number of the owner (from the units file),
-owner's share in the subscribed capital, in percent,
-owner's share in the voting rights, in percent.

26.In the participations file, every participation relationship between an enterprise and any of its owners (which may be another enterprise or a public authority) is stored, that is, separately at every hierarchical level and independently of each other. All direct and indirect participation relationships of an enterprise are linked with each other across all hierarchical levels and are made visible through the databank system. In a separate programme run of the databank system, all participation relationships are recalculated and the publicly controlled enterprises determined again.

27.So far, not all surveys have been conducted yet, so that not all public undertakings are stored in the databank.

4Storing and updating the characteristic "public undertaking" in the statistical business register with regard to legal persons

4.1Completely setting up the register is a precondition

28.The statistical business register in Germany is currently being set up. It contains some 2million units. Following a plan by stages, which has been agreed upon with Eurostat, setting up the register will be finished by the end of 1999. What has not been included yet is the services sector. Public undertakings may occur in any economic branch. To avoid duplication of work, it is suitable not to take over the characteristic "public undertaking" from the databank into the business register before the register has completely been set up.

4.2Matching the legal units between the databank and the statistical business register by means of name, legal form, and address

29.First, a batch programme (software package based on batch processing) is used to find duplicates between the databank and the business register by means of name, address, and legal form. Subsequently, the groups of duplicates found will be processed in dialogue mode. Enterprises which are contained in the databank, but for which no match could be found in the business register, will be searched manually in the register.

4.3Including the legal unit's identity number from the data file

30.If the search for duplicates finds a match for a specific unit, the identity number will be transferred from the data file of units into the data record stored in the business register. Also, the indicator of the legal unit's character as a "public undertaking" will be set to "YES" in the business register. After the identity number has been integrated from the databank into the business register, there will be less allocation work required in the following years for updating the entries in the business register. Only additional units will then have to be matched by using name or designation, legal form, and address.

5Information on the economic importance of legal units with "public undertaking" character

31.The number of and turnovers attained by public undertakings are shown in a breakdown by economic branches in table1 and by legal forms in table2. Table3 shows selected characteristics for the overall economy, public budgets or the "general government" sector, and for public undertakings.

6Breaking down statistical results by private and public enterprises

32.The Council Regulation (EC, EURATOM) No 58/97 of 20 December 1996 Concerning structural business statistics[5)] requires specific results to be broken down to the 3-digit
level of NACE Rev. 1 (groups) by enterprises of the private and public sectors, that is in the

-detailed module for structural statistics in industry (section 7 no. 3); for the characteristics of series 2C, a breakdown by type of ownership between private and public enterprises is required according to Commission Directive 723/80/EEC of 25 June 1980.[6)]

-detailed module for structural statistics in construction (section 7 no. 3); for the characteristics of series 4C, a breakdown by type of ownership between private and public enterprises is required according to Commission Directive 723/80/EEC of 25 June 1980.6)

The characteristics of series 2 C and 4 C for which results have to be broken down are as follows:

Number of enterprises
Production value
Value-added at basic prices (optional)
Value-added at factor cost
Total purchases of goods and services
Wages and salaries
Social security costs
Number of persons employed
Number of employees
Total intramural R & D expenditure (series 2C only)
Total number of R & D personnel (series 2C only).


33.The Council regulation on statistical business registers as well as the requirements of the regulation on structural business statistics make it necessary to identify legal units with the character of „public undertaking“ (legal persons only) in the business register for statistical purposes. For the definition of such undertakings reference is made to the Commission Directive 80/723/EEC of 25 June 1980 on the transparency of financial relations between Member States and public undertakings.

34.In Germany, a special register of public undertakings has been built up and is being updated for purposes of statistices on annual accounts of public undertakings and of statistics on the personnel of public institutions (Federal Government and Laender as well as communities and local authorities). This register will be linked to the general business register by matching of addresses in both registers. After this the identification number and the character of „public undertaking“ of the legal unit will be recorded in the general business register. This information will be updated annually.


-Public undertaking

-Financial relations

-Business register

-Participation of public authorities in enterprises

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Table 1: Publicly controlled funds, institutions, and business enterprises

by economic branches, 1994

Economic branches / Number / Turnover attained DM million
Art and culture / 131 / 716
Sports and recreation / 195 / 500
Housing / 790 / 18,994
Waste water disposal / 644 / 5,529
Waste disposal / 266 / 7,234
Electricity supply / 184 / 39,553
Gas supply / 109 / 12,991
Water supply / 1,410 / 7,128
Transport enterprises / 489 / 15,290
Combined supply and transport enterprises / 719 / 71,327
Sanatoria / 218 / 1,433
Other economic branches / 2,182 / 185,296
Total / 7,337 / 365,991

Table 2: Publicly controlled funds, institutions, and business enterprises

by legal forms, 1994

Legal form / Number / Turnover attained
DM million
Private legal forms / 4,253 / 256,076
-Public limited companies
-Limited liability companies
-Other private legal forms
Public legal forms / 3,084 / 109,915
-Special-purpose associations and other legal persons of inter-community cooperation
-Other corporations under public law
-Municipal undertakings
-Other public legal forms
Total / 7,337 / 365,991

Table 3: Selected key data from a macroeconomic aspect
for the years 1993 and 1994

Specification / 1993 / 1994
Value added of the overall economoyDM million / 2 912 460 / 3 055 360
Value added of the general government sectorDM million / 365 800 / 371 050
Value added of public undertakingsDM million / 108 596 / 143 569
Number of public budgets / 16 304 / 15 266
Number of public undertakings / 6 596 / 7 337
Staff expenditure of public budgetsDM million / 358 747 / 379 448
Personnel costs of public undertakingsDM million / 125 200 / 114 671
Number of persons engaged under public budgets / 6 502 646 / 6 094 300
Number of persons engaged by public undertakings / 2 207 835 / 2 013 843

Chart 1: Direct and indirect participation of public authorities

Chart 2: Surveys designed to determine public undertakings

[1)]*)The author would like to thank Hans-Ulrich Braun and Hannelore Pöschl for their input to this report.

1) Official Journal of the European Communities No L 196 of 5 August 1993, p. 1.

[2)] General Secretariat of the Council: Document SN/1522/93.

[3)] Official Journal of the Eurpean Communities No L 195 of July 1980, p. 35.

[4)] Federal Law Gazette, part I, p. 2119.

[5)] Official Journal of the European Communities No L 14 of 17 January 1998, p. 1.

[6)] Standardized specification of results to be transmitted, Eurostat document/D/SBS-SPC/APR98/5.