Terms used in official statistics

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Principal


Definition:

A unit which enters into an agreement with another unit (contractor) to perform specific tasks e.g. part or whole production process, services connected with employment or ancillary services.



Examples of parts of the production process which can be outsourced are: manufacturing activities, employment services, ancillary services, etc. The principal and the contractor can be located on the same economic territory or on different economic territories: the actual location does not affect the classification of either unit. In the case of industrial production, the principal provides the contractor with the technical specifications for the specific products. The material for production (raw material or intermediate products) may be supplied by the principal (owned by him) or not. A principal who outsources the entire production process should be classified in manufacturing only if he owns the input material (and therefore owns the end result). A principal who outsources only part of the production process should be classified in manufacturing. In other cases, the principal should be classified according to the value-added principle: this may be in Section G "Wholesale and retail trade" (according to the activity and specificity of the products sold) or in other sections, e.g. M "Professional, scientific and technical activities" or N "Administrative and support service activities".


Source:
  • Regulation of the Council of Ministers of 24 December 2007 on the Polish Classification of Activities (PKD)
    Place of publication: Dz.U. 2007 nr 251 poz. 1885

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Urząd Statystyczny we Wrocławiu
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