Why Primary Sources Matter

Hurray! German company data is now available in OpenCorporates! Does this mean I don’t have to pay for the official company register access anymore?

This morning I confronted my boss Christian with a fact that I had found on the internet yesterday evening. Although he claimed to be the director of his company, I could not find him on OpenCorporates. For those of you who do not know what this platform does: OpenCorporates is the largest open database of companies and company data in the world. The site claims to have over 160 million companies indexed. As of yesterday, they added 5 million German companies to their database. Should I believe Christian or OpenCorporates in this matter?

When I conduct due diligence and background checks, OpenCorporates is among one of the first platforms I use. As good as it is, OpenCorporates is still a secondary source and when it comes to reliable and present-day information, I rather choose to trust primary sources.

Don’t get me wrong, secondary sources such as the aforementioned or compliance tools like LexisNexis are amazing and are really helpful to get an overview of what you are dealing with, but they all have little flaws. In some cases, the data is not as up-to-date as it should be, in other cases they are lacking essential information, such as the company shareholders. The worst-case scenario is when data is falsely aggregated during the import-process, linking the wrong entities to each other. Throughout my investigations, I have stumbled upon these issues more than once when using secondary sources.

Based on yesterday’s import of the German company data into OpenCorporates, I decided to check my own employer: Corporate Trust, Business Risk & Crisis Management GmbH. This is what OpenCorporates provided:

sources

There are some flaws in this dataset, because I am sure Christain would love to see his name in here as well. After all he founded the company and has been the director of Corporate Trust ever since. This is not just a problem within OpenCorporates, I have seen similar issues quite often in expensive commercial compliance databases as well. As you can see, the dataset is also missing information on the company’s shareholders. Even when this information is contained in compliance databases, it is sometimes outdated.

These are the reasons I always try to use primary sources, such as official government company registers, whenever possible. OpenCorporates is a great starting point to tell me where to look for more detailed information, especially since it offers the possibility to search for individuals (something that many government company registers lack), but the official company registers provides the real intelligence. This is where things can get challenging. Let us have a look at the company register in Germany, our Handelsregister. It requires a formal registration, which is only available in German. No credit card payments are possible, only direct debit. For many countries, this alone may prove to be an obstacle. On the bright side, once you have access to this database, you will gain access to the original company documents, including a list of shareholders for private limited companies.

In other countries, you can only gain access to the national company registers if you are a resident of that country and in most cases against payment. Unfortunately, nothing in life is free (except the amazing British Companies House). So when it comes to obtaining all relevant and up-to-date data, a bit more is required than just the access to (free) secondary sources.

Just to be sure about Christian, I checked our company in the official German company register. Turns out he is listed as director in the Handelsregister after all.

Matthias Wilson / 06.02.2019

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