Which companies make up the SME sector?

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Whether a company belongs to the SME sector (small and medium-sized enterprise sector) depends, for example, on what state aid it can count on - of course, the smaller the entity, the more lenient it is treated. That is why very precise criteria have been developed that allow to determine whether a given company qualifies for the sector, and even whether it is a micro, small or medium-sized entity. They are the same throughout the EU and result from the annex to the European Commission Regulation No. 800/2008 (Journal of Laws of the EU No. L 214 of August 9, 2008). So let's check what companies make up the SME sector!

SME sector - two basic conditions

In order to determine whether a given company belongs to the SME sector, two indicators are of fundamental importance:

  • number of employees,
  • financial results defined as the sum of assets and / or the amount of annual turnover.

To be considered as belonging to the SME sector, a company must employ fewer than 250 people, its annual turnover must not exceed EUR 50 million, and / or the total annual balance sheet must be less than EUR 43 million.

Important!

When determining the amount of employment, one should take into account the number of employees per year converted into full-time jobs. Express as a fraction of people who work part-time or who have not worked a full year. This number includes employees employed under an employment contract as well as other people working for the company, e.g. under management contracts. However, it does not include, among others, persons employed on the basis of a mandate contract or a specific specific contract.

Principles of establishing the status of a company from the SME sector

At this point, it should be emphasized that the number of employees is of fundamental importance for the determination of the SME status. This means that if an entrepreneur employs 250 or more employees, he does not belong to the SME sector - then there is no need to examine other factors. However, if his company employs fewer than 250 people, his status depends on the achieved financial results.

However, when it comes to financial data - turnover and balance sheet - they can be used interchangeably. In this case, the entrepreneur may choose the criterion that is more favorable from his point of view. Only when the company's financial results in both indicators exceed the established standards, will it be classified as a group of large enterprises.

SME sector and partner companies

It turns out, however, that the above-mentioned conditions are not the only criteria that an enterprise must meet in order to be considered as belonging to the SME sector.If the company is related to other entities, i.e. it has the so-called partner or related companies, then the situation becomes a bit more complicated.

Attention!

We deal with a partner company when the share of one company in another exceeds 25%, but is less than 50%. Associated companies occur when the threshold of 50 percent. shares is exceeded and there is one of a special kind of relationship between them, e.g. one of them has the majority of the voting rights in another enterprise as shareholder, shareholder or member.

Importantly, if the share of a foreign company does not exceed 25%, then the company can still be considered independent and thus belonging to the SME sector.

When this limit is exceeded, in order to qualify the company to the appropriate SME category, the corresponding data of the partner company (in the appropriate proportion) or 100 percent should be added to its employment and financial data. related company data (there are, however, some exceptions to this rule, e.g. linking companies in connection with the help of a business angel).

Which companies make up the SME sector - division into micro, small and medium-sized enterprises

Importantly, the above-mentioned annex to the regulation also shows when a company can be called micro, small or medium (see the table below).

 

microenterprise

small enterprise

medium-sized enterprise

number of employees

less than 10 employees

less than 50 employees

less than 250 employees

annual turnover

less than 2 million euros

less than 10 million euros

less than 50 million euros

total assets

less than 2 million euros

less than 10 million euros

less than 43 million euros