Brussels, 15/05/2003 (Agence Europe) - On 6 May, the European Commission adopted a new definition of “micro”, small and medium-sized enterprises with the aim of promoting entrepreneurship, investment and growth , facilitating access to startup capital, cutting red tape and increasing legal security. The new definition keeps the current staffing thresholds for the companies in question but sharply raises the financial ceilings (turnover or total balance sheet) because of rises in inflation and productivity since 1996, the year of the first EU definition of SMEs. To ensure a smooth change-over, the new definition will come into force on 1 January 2005.
The definition of SMEs currently in use in the EU is contained in a Commission Recommendation adopted in 1996. The new Recommendation still defines a company as medium-sized if it employs less than 250 people, as small if it employs less than 50 and as a “micro-enterprise” if it employs less than 10. The criteria for turnover (TO) and total balance sheet (TB) have been changed as follows: 1) medium-sized enterprise: CA: EUR 50 millions (mil) (40 mil in 1996) - TB: 43 mil (27 mil in 1996); 2) small enterprises: CA: 10 mil (7 mil in 1996) - TB: 10 mil (5 mil in 1996); micro-enterprises: CA or TB 2 mil (no definition given in the past). For the first time, the new definitions set precise financial thresholds for micro-enterprises. The Commission believes that the establishment of support programmes for micro-enterprises by national and regional authorities should be facilitated. Craft companies and businesses working in the social field are recognised as enterprises in the new Recommendation. The Commission notes that the sharp rise in the financial ceilings will only lead to a small rise in the total number of SMEs but it should be of use to investing companies. Minority share-holdings of large companies in SMEs are also facilitated by the new Recommendation, but in a press release the Commission says this will not jeopardise SME independence.
The review of the 1996 Recommendation aims to cut the administrative burden and accelerate procedures by means of an optional single self-declaration form; - facilitate the funding of SMEs by guaranteeing favourable treatment by regional funds, risk capital providers and "business angels"; - promoting innovation and research by facilitating investment conditions in companies formed by universities or research centres; - favouring the establishment of “bundles” of independent SMEs by clearly defining different types of companies (autonomous, partners and connected companies) and transparent calculation of the financial and staff thresholds; the Commission points out that the calculation method gives a more realistic image of their economic power while restricting the number of different types of connection between enterprises that have to be taken into account in arriving at the calculation, which therefore greatly increases legal security; - avert abuse by aligning the idea of “connected” enterprises with the directive on consolidated accounts to make it extremely difficult to get round the definition; promoting professional training and work/home life balance; apprentices and pupils following professional training are not included in the employee thresholds in order to favour companies that provide professional training; likewise parental and maternity leave is not included in the figures so as to avoid penalising companies allowing a balance between work and home life.