Company searches leaving a paper trail to the gravy train

AUSTRALIA may not be leading the world in gold generation at the Olympics, but it is world champion in extracting gold for company searches and documents.
Nanjing Night Net

Even though the Australian Securities and Investments Commission recently reduced some of its charge rates, the cost of searching basic corporate information is more expensive here than from pretty much every other English-speaking, government-run, corporate database.

Bizarrely, in a country that prides itself on accountability and transparency, the cost of buying company documents in Australia is often more expensive than obtaining similar documents from places such as the British Virgin Islands and Guernsey, which generate huge amounts of income providing largely anonymous offshore incorporation services.

Insider is in the pulpit on this one after spending many hours in the past week chasing down local and international operators of investment ”mentoring” companies, such as Senen Pousa’s ProphetMax.

To be clear, this is not an attack on ASIC, which administers one of the speediest, easy-to-use and most reliable companies databases around. Its charges are there because it is owned by a federal government that long ago decided to adopt user-pays mechanisms as an alternative way of filling its coffers without actually calling them taxes.

ASIC’s charges for company searches are also far less heinous than those levied by the ”information brokers” to which it sublets its database. They double, treble and even quadruple their charge-outs for providing identical services – and Insider suspects that their profit margins might be even fatter because they are probably getting access at a wholesale rate rather than the retail price charged to punters.

This may go a long way to explaining why accounting and legal fees for commercial matters are often so high.

The regulator’s annual report last financial year revealed that a record 68.5 million searches were conducted via its database – or nearly 200,000 a day.

ASIC said that last financial year it raised $580 million for government coffers from fees and charges levied under the Corporations Act and National Credit Act. That includes mandatory filings, and registration fees, but it is a safe assumption that a goodly slice is from company searches by third parties.

Not all searches cost money, but obtaining any meaningful information does. For a simple company extract that will tell you when a company was incorporated, who is on the record as directors, who owns it and what documents have been filed – so long as the documents have been filed – ASIC will charge you $9.

That same search from information brokers can cost anywhere from $15.95 (the price charged by the Queensland Government’s CITEC arm) to an extraordinary $39.60 by NDC Business Information.

The eSearch Group charges only $13.20 for account holders, but casual users get hit with $18.70.

NDC’s audience is accounting and financial services companies, which makes Insider wonder how much of that cost gets passed on to the customers of its members’ firms.

ASIC levies an $18 charge for a copy of a document less than 10 pages (yes – $18 for a single page document!), which begins to look reasonable after you see that NDC’s schedule of charges starts at $48.95. Insider’s sibling publication The Australian Financial Review is an information broker too, and will charge you $30.80 for a sub-10 page document, which is about average.

Order a document larger than 10 pages, and we are only talking electronic delivery here – not snail mail hard copies – and you can be out of pocket up to $70.

Those charges, by the way, apply even if you are silly enough to search for documents of an ASX-listed company that are freely available through the sharemarket operator’s portal.

Use New Zealand’s company service, though, and you will not pay a cent to find out who owns and directs a company, or to see most of the documents filed.

The US Securities and Exchange Commission, which covers public companies, allows free access to its Edgar database, even though it can be cumbersome. Searching private company information can be a little trickier in the US because you have to know in which state they are registered, and different states have different attitudes to making the information available.

In Britain, each document search costs only £1, irrespective of size. In Hong Kong it is about $A3. Singapore is one of the more expensive places, not to mention clunkiest of online mechanisms, but still undercuts Australia in most instances.

Even the British Virgin Islands only wants $US25 for a company search or document – although it is manual, rather than automated.

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This story Administrator ready to work first appeared on Nanjing Night Net.