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User guide to the SME defi nition - European Commission

1. e e Autonomous at first sight but linked to a group Example 4 Situation Pu b lic and i or B C and D are all partners to my enterprise A through shares of 25 30 and S 25 respectively However B and D are a university and an institutional investor IN SL tuti on al they are not linked to each other and their individual holding of voting rights does p artners wh j ch not exceed 50 They are included in the list of exceptions art 3 2 a d of the Recommendation and thus their data is not included in the calculation are exempt from the calculation Calculation To calculate my data only need to include 100 of my own data and 30 of enterprise C s data My TOTAL 100 of A 30 of C My TOTAL 30 of C Partner Partner 100 of A Example 5 Linked public and or institutional partners which are not exempt from the calculation My TOTAL 100 of D 25 oon Ge 100 of B 100 of A USER GUIDE TO THE SME DEFINITION Situation B C and D are all partners to my enterprise A through shares of 25 25 and 30 respectively Although B and D are a university and a public investment corporation they are linked to each other and their combined holding of voting rights is 55 thus exceeding the 50 threshold for ex ceptions Their data must therefore be included in the calculation Calculation To calculate my data need to include 100 of my own data 25 of C s
2. Linked USER GUIDE TO THE SME DEFINITION BACKGROUND TO THE CURRENT SME DEFINITION AND USER GUIDE A first EU wide SME definition was introduced in 1996 Commission Recommendation 96 280 EC of 3 April 1996 concerning the definition of small and medium sized enterprises In 2003 it was revised in order to reflect gener al economic developments and address specific hurdles confronting SMEs Wide ranging discus sions between the Commission Member States business organisations and experts as well as two open consultations took place and provided input and support for the revision This process resulted in the adoption of the current version of the SME definition The 2003 definition is more suited to the differ ent categories of SMEs and takes better account of the various types of relationships between en terprises It helps to promote innovation and fos ter partnerships while ensuring that only those enterprises that genuinely require support are targeted by public schemes The 2003 revisions to the SME definition mainly concerned gt An update of the thresholds to follow devel opments in prices and productivity gt Setting financial thresholds for the growing number of micro enterprises in order to en courage the adoption of measures addressing the specific problems micro enterprises face especially during the start up phase gt Facilitating equity financing for SMEs by granting favourable treatment to
3. INTRODUCTION Nine out of every 10 enterprises is an SME and SMEs generate 2 out of every 3 jobs A New Boost for Jobs Growth and Investment is the first priority of Commission President Juncker Jobs growth and investment will only return to Europe if we create the right regulatory environment and promote a climate of entrepreneurship and job creation We must not stifle innovation and competitiveness with too prescriptive and too detailed regulations particu larly when it comes to small and medium sized enterprises SMEs SMEs are the backbone of our economy creating more than 85 of new jobs in Europe and we have to free them from burdensome regulation SMEs the engine of the European economy Micro small and medium sized enterprises SMEs are the engine of the European economy They drive job creation and economic growth and ensure social stability In 2013 over 21 million SMEs provided 88 8 million jobs throughout the EU Nine out of every 10 enterprises is an SME and SMEs generate 2 out of every 3 jobs SMEs also stimulate an entrepreneurial spirit and inno vation throughout the EU and are thus crucial for fostering competitiveness and employment Given their importance to Europe s economy SMEs are a major focus of EU policy The Europe an Commission aims to promote entrepreneur ship and improve the business environment for SMEs thereby allowing them to realise their full potential in tod
4. Os ott KZ N User guide to the SME definition S Q all DISCLAIMER This SME User Guide serves as general guidelines for entrepreneurs and other stakeholders when applying the SME definition It does not have any legal force and does not bind the Commission in any way Commission Recommendation 2003 361 EC as published in the Official Journal of the European Union L 124 p 36 of 20 May 2003 is the sole authentic basis for determining the conditions regarding qualification as an SME This guide contains gt Details and explanations of the SME definition which took effect on 1 1 2005 gt A model declaration form that individual companies may complete when applying to SME support schemes in order to establish their SME status Cover picure Gettyimages Picures Thinkstock Europe Direct is a service to help you find answers to your questions about the European Union Freephone number 0080067891011 The information given is free as are most calls though some operators phone boxes or hotels may charge you More information on the European Union is available on the Internet http europa eu Luxembourg Publications Office of the European Union 2015 ISBN 978 92 79 45322 9 doi 10 2873 782201 print ISBN 978 92 79 45301 4 doi 10 2873 620234 online European Union 2015 Reproduction is authorised provided the source is acknowledged Printed in Belgium PRINTED ON ELEMEN
5. per enterprise G D P EUR 1 000 The data entered in the Total row of the above table should be entered in line 3 regarding linked enterprises of the table in the Annex to the declaration LINKAGE SHEET only for linked enterprises not included by consolidation in Box B 1 Precise identification of the enterprise Nameor eT Address of registered office iiss zenz sipsesscoassoconsssisiee ix ocsacs 09T ESPESSAS er SE bade 52H Reh EE Registration VAT number Names and titles of the principal director s seene 2 Data on the enterprise Reference period Headcount AWU Annual turnover Balance sheet total Total EUR 1 000 These data should be entered in Box B 2 in Annex B Important The data of the enterprises which are linked to the applicant enterprise are derived from their accounts and their other data consolidated if they exist To them are aggregated proportionally the data of any possible partner enterprise of that linked enterprise situated immediately upstream or downstream from it unless it has already been included through consolidation Such partner enterprises are treated like direct partner enterprises of the applicant enterprise Their data and a partnership sheet have therefore to be added in Annex A C To be determined by the Member State according to its needs Chairman CEO Director General or e
6. s SME status Since the use of this form is voluntary Member State ad ministrations are free to adapt its content to suit customary national usage Need more help A Frequently Asked Questions section is available on the SME Definition website and is regularly updated All available language versions of this guide can be downloaded from the same website SMEs may also send questions they have on this topic to GROW SME DEFINITION ec europa eu USER GUIDE TO THE SME DEFINITION APPLYING THE SME DEFINITION The average European enterprise employs no more than six people and without delving fur ther into the details of the enterprise s situation would be considered an SME The definition ap plied here however takes into account possible relationships with other enterprises In certain cases those relationships particularly if they create significant ownership links or give access to additional financial or other resources imply that an enterprise is not an SME SMEs 3 categories The SME definition distinguishes between three different categories of enterprises Each category corresponds to a type of relationship that an en terprise could have with another This distinction is necessary in order to establish a clear picture of an enterprise s economic situation and to ex clude those that are not genuine SMEs The categories are gt Autonomous if the enterprise is either com pletely independent or has
7. Reference period Headcount AWU Annual turnover Balance sheet total Raw data EUR 1 000 Reminder These raw data are derived from the accounts and other data of the partner enterprise consolidated if they exist To them are added 100 of the data of enterprises which are linked to this partner enterprise unless the accounts data of those linked enterprises are already included through consolidation in the accounts of the partner enterprise If necessary add linkage sheets for the enterprises which are not yet included through consolidation 3 Proportional calculation a Indicate precisely the holding of the enterprise drawing up the declaration or of the linked enterprise via which the relation to the partner enterprise is established in the partner enterprise to which this sheet relates Indicate also the holding of the partner enterprise to which this sheet relates in the enterprise drawing up the declaration or in the linked enterprise b The higher of these two holding percentages should be applied to the raw data entered in the previous box The results of this proportional calculation should be given in the following table Partnership box Percentage Headcount AWU Annual turnover Balance sheet total Proportional results EUR 1 000 These data should be entered in Box A in Annex A U To be determined by the Member
8. data as well as B and D s jointly held stake of 55 in the shares voting rights However since B and D jointly hold 55 of the voting rights need to aggregate 100 of their data Note if the linked entities are both public bodies or linked with public bod ies then my enterprise would not qualify as an SME Art 3 4 of the Annex to the Recommendation should apply instead My TOTAL 100 A 100 B 25 C 100 D Linked Partner i Partner D Example 6 Situation Enterprise B is partner to my enterprise A through a share of 25 Enter Partners and e e iP Meet a prise C is partner to enterprise B through a share of 30 Furthermore my partners enterprise A is linked to enterprise D through a holding of 65 And enter prise E is partner to enterprise D through a share of 25 Enterprise D has to linked 7 Ja a linked company which in turn has a partner 100 of A enterprises p Calculation The proportionate data of all enterprises that are partner to the enterprise to be assessed as well as partners to any linked enterprise need to be taken into account Data of a partner to a partner of the enterprise to be assessed however are not to be taken into account My TOTAL 100 of A 25 of B 100 of D 25 of E 100 of F 25 of G My TOTAL 25 ofE 25 of G 54 Stop 1 Partner Partner i CALCULATION l l 100 of D 100 of F ine 1 94 E i i X E Sao Partner
9. it should be updated to take account of changes in both prices and productivity USER GUIDE TO THE SME DEFINITION 39 20 5 2003 EN Official Journal of the European Union L 124 37 6 AS regards the ceiling for the balance sheet total in the not previously been specified The case of business absence of any new element it is justified to maintain angels individuals or groups of individuals pursuing a the approach whereby the turnover ceilings are regular business of investing venture capital deserves subjected to a coefficient based on the statistical ratio special mention because compared to other venture between the two variables The statistical trend requires capital investors their ability to give relevant advice a greater increase to be made to the turnover ceiling to new entrepreneurs is extremely valuable Their invest Since the trend differs according to the size category of ment in equity capital also complements the activity of the enterprise it is also appropriate to adjust the coeffi venture capital companies as they provide smaller cient in order to reflect the economic trend as closely as amounts at an earlier stage of the enterprise s life possible and not to penalise microenterprises and small enterprises as opposed to medium sized enterprises This coefficient is very close to 1 in the case of microenter prises and small enterprises To simplify matters there l l fore a single value mu
10. to apply it as widely as possible The Commission hopes that this revised guide will be useful to SMEs and that a very large number of enterprises will benefit from the measures introduced by European national re gional and local authorities in accordance with this definition Further refinements may be made to the defi nition and the Commission will if necessary adapt it in the coming years to take account of experience gained and economic developments throughout the European Union The text of the 2003 Commission recommen dation and the model declaration form can be found from page 35 onwards Example 1 with two partners My TOTAL 32 of C 25 of D 100 of B 100 of A USER GUIDE TO TRE SME DEFINITION Situation My enterprise A is linked to enterprise B through the holding of 60 that B has in my enterprise But B also has two partners enterprises C and D which own respectively 32 and 25 of B Calculation To calculate my data must add 100 of the data of B plus 32 of the data of C and 25 of the data of D to the data of my own enterprise My TOTAL 100 of A 100 of B 32 of C 25 of D N N x x Partner 7 Partner N Linked My enterprise A Example 2 Situation Indi re ct Enterprises B and C are both partners of my enterprise A since they each have a stake of 38 in my enterprise But B is also linked to D through a p
11. State according to its needs Chairman CEO Director General or equivalent Definition Article 6 paragraph 3 first sub paragraph In terms of the share of the capital or voting rights whichever is higher To this holding should be added the holding of each linked enterprise in the same enterprise Definition Article 3 paragraph 2 first sub paragraph ANNEX B Linked enterprises A DETERMINE THE CASE APPLICABLE TO THE APPLICANT ENTERPRISE D Case 1 The applicant enterprise draws up consolidated accounts or is included by consolidation in the consolidated accounts of another enterprise Box B 1 D Case 2 The applicant enterprise or one or more of the linked enterprises do not establish consolidated accounts or are not included in the consolidated accounts Box B 2 Please note The data of the enterprises which are linked to the applicant enterprise are derived from their accounts and their other data consolidated if they exist To them are aggregated proportionally the data of any possible partner enterprise of that linked enterprise situated immediately upstream or downstream from it unless it has already been included through consolidation B CALCULATION METHODS FOR EACH CASE In case 1 The consolidated accounts serve as the basis for the calculation Fill in Box B 1 below Box B 1 Headcount AWU Annual turnover Balance sheet total Total Where in the consolid
12. USER GUIDE TO THE SME DEFINITION Am a linked enterprise Article 3 3 Linked enterprises are those that form a group through the direct or indirect control of the ma jority of voting rights of an enterprise by another or through the ability to exercise a dominant in fluence on an enterprise One or more natural persons acting jointly or Definition Two or more enterprises are linked when they have any of the following relationships gt One enterprise holds a majority of the share holders or members voting rights in another gt One enterprise is entitled to appoint or re move a majority of the administrative man agement or supervisory body of another gt A contract between the enterprises or a provi sion in the memorandum or articles of associ ation of one of the enterprises enables one to exercise a dominant influence over the other gt One enterprise is able by agreement to ex ercise sole control over a majority of share holders or members voting rights in another A typical example of a linked enterprise is the wholly owned subsidiary In case a relationship of this kind occurs through the ownership of one or more individ uals acting jointly the enterprises involved are considered as linked if they operate on the same or adjacent markets 1 10 See glossary for more info My TOTAL 100 of A 100 of B My TOTAL Establishing which data to take into
13. account Art 6 2 6 3 and 6 4 With respect to linked enterprises 100 of the linked enterprise s data must be added to those of the enterprise in question to determine if it meets the staff headcount and one of the finan cial thresholds of the definition How to calculate the data of linked enterprises The percentages given below are purely illustrative For further examples see pages 25 29 100 of B 100 of A 100 of C 100 of D In most Member States such enterprises are re quired by law to draw up consolidated accounts or are included by way of full consolidation in the accounts of another enterprise When an enterprise does not draw up consolidat ed accounts and the enterprise to which it is linked is in turn related partner of link to other enterpris es the enterprise in question must add 100 of the data of all the linked enterprises and the pro rata of the partner enterprises My enterprise A owns 51 of C and 100 of D while B has a 60 stake in my business As the holding in each case is above 50 take 100 of the data from each of the four enter prises concerned when calculating my headcount and financial thresholds My TOTAL 100 of A 100 of B 100 of C 100 of D My enterprise A Enterprise D 100 Summary which data Whether an enterprise draws up consolidated accounts or not the ultimate data to consider should include the data of gt Any partner co
14. administrations in devising enterprise policies which take account of the specific needs and skills of these categories of enterprise is thus a question of major importance Promoting the development of such policies is the main objective of the new the Commission Recommendation on the definition of SMEs A more precise definition will ensure greater legal certainty More suited to the various sub categories of SME and taking account of the various types of relations between enterprises it will promote investment and innovation in SMEs and foster partnerships between enterprises These advantages should be acquired while preventing enterprises which do not have the economic characteristics or face the problems of genuine SMEs from benefiting unduly from measures targeted at SMEs This Recommendation has been the subject of extremely wide ranging discussions with business organisations with the Member States and individual business experts within the Enterprise Policy Group The preliminary draft was in addition the subject of two open consultations on the Internet After work lasting for more than one year there was almost complete consensus despite the diversity of the objectives pursued All those who contributed to the revision felt that it is important that the increased legal certainty and improved recognition of the economic reality should be accompanied by an effort by administrations to simplify and speed up the administrative handlin
15. below which means among other things that the voting rights of one in the other do not exceed 50 C Henceforth in the text the term Definition refers to the Annex to Commission Recommendation 2003 361 EC on the definition of SMEs Definition Article 3 In terms of the share of the capital or voting rights whichever is higher is applied To this percentage should be added the holding in that same enterprise of each enterprise which is linked to the holding company Definition Article 3 paragraph 2 An enterprise may continue being considered as autonomous when this 25 threshold is reached or exceeded if that percentage is held by the following categories of investors provided that those are not linked with the applicant enterprise a public investment corporations venture capital companies individuals or groups of individuals with a regular venture capital investment activity who invest equity capital in unquoted businesses business angels provided the total investment of those business angels in the same enterprise is less than EUR 1 250 000 b universities or non profit research centres c institutional investors including regional development funds d autonomous local authorities with an annual budget of less than EUR 10 million and less than 5000 inhabitants Definition Article 3 paragraph 2 second sub paragraph U Tf the registered office of the enterprise is situated in a Member State which has pr
16. gt A linked enterprise The calculations for each of the three types of enterprise are different and will ultimately de termine whether the enterprise meets the various ceilings established in the SME definition Depending on the situation an enterprise may have to take into account gt Only its own data gt A proportion of the data in case of a partner en terprise or gt All the data of any enterprise con sidered linked to it Step Any such relationships an enterprise has with other enterprises direct or indirect need to be taken into consideration The geographical origin or the field of business activity of these enter prises is not relevant The examples in this guide illustrate the extent to which relationships need to be taken into account Please note that enterprises that draw up consolidated accounts or that are includ ed by way of full consolidation in the consolidated accounts of another enterprise are usually treated as linked enterprises 7 However in case the link arises through natural persons the markets on which the enterprises operate are a deter mining factor 8 Please see glossary for more info on consolidation Ss sse e ese Am I an autonomous enterprise Article 3 1 AN AUTONOMOUS ENTERPRISE IS NOT A PARTNER WITH OR LINKED TO ANOTHER ENTERPRISE SEE ART 3 1 P 35 see pages 25 26 and 29 for examples of indirect partners My enterprise is totally ind
17. lose SME status if it goes above the ceilings for two consecutive accounting periods Conversely an enterprise may gain SME status if it was previously a large enterprise but then fell below the ceilings for two consecutive accounting periods Not SME Not SME Not SME Not SME Not SME Not SME Not SME Not SME Not SME 5 Latest approved accounting period The purpose of Article 4 2 of the SME definition is to ensure that enterprises that experience growth are not penalised with loss of SME status unless they exceed the relevant thresholds for a sustained period In line with this intention Article 4 2 does not apply in the case of enterprises that exceed the relevant SME thresholds as a result of a change in ownership following a merger or acquisition which is usually not considered temporary and not subject to volatility Enterprises that are subject to a change in ownership need to be assessed on the basis of their shareholder structure at the time of the transaction not at the time of closure of the latest accounts Therefore the loss of SME status may be immediate 6 See section 1 1 3 1 point 6 e of the Commission Decision 2012 838 EU of 18 December 2012 calculate these data To work out the data to be considered and as sessed against the thresholds an enterprise must first establish whether it is gt An autonomous enterprise by far the most common category gt A partner enterprise or
18. rules in competition law where the financial criteria must also be used and adhered to 12 Account should also be taken in suitable cases of rela tions between enterprises which pass through natural persons with a view to ensuring that only those enter 8 Following the endorsement of the European Charter for prises which really need the advantages accruing to Small Enterprises by the European Council of Santa SMEs from the different rules or measures in their favour Maria da Feira in June 2000 microenterprises a cate actually benefit from them In order to limit the exami gory of small enterprises particularly important for the nation of these situations to the strict minimum the development of entrepreneurship and job creation account taken of such relationships has been restricted should also be better defined to the relevant market or to adjacent markets refer ence being had where necessary to the Commission s definition of relevant markets in the Commission notice on the definition of relevant market for the purposes of Community competition law 9 To gain a better understanding of the real economic position of SMEs and to remove from that category groups of enterprises whose economic power may exceed that of genuine SMEs a distinction should be 13 In order to avoid arbitrary distinctions between different made between various types of enterprises depending public bodies of a Member State and giv
19. B if the applicant enterprise has at least one linked enterprise and any additional sheets Calculation for the partner or linked type of enterprise see explanatory note 2 Reference period Headcount AWU Annual turnover Balance sheet total 1 Data Cof the applicant enterprise or consolidated accounts copy data from box B 1 in annex B 2 Proportionally aggregated data of all partner enterprises if any copy data from box A in annex A 3 Added up data of all linked enterprises if any if not included by consolidation in line 1 copy data from box B 2 in annex B Total EUR 1000 Definition Article 6 paragraphs 2 and 3 accounts have not yet been approved the data to app Article 4 All data must be relating to the last approved accounting period and calculated on an annual basis In the case of newly established enterprises whose ly shall be derived from a reliable estimate made in the course of the financial year Definition The data of the enterprise including the headcount are determined on the basis of the accounts and other data of the enterprise or where they exist the consolidated accounts of the enterprise or the consolidated accounts in which the enterprise is included through consolidation The data entered in the Total row of the above table should be entered in the box Data used to determine the category of ent
20. TAL CHLORINE FREE BLEACHED PAPER ECF TABLE OF CONTENTS INTRODUCTION srce gece lend qatea geod Goel epg aE ep grag Give eb a 5 WHY A EUROPEAN SME DEFINITION 2 0 niid gigia 4 THE OBJECTIVES OF THIS GUIDE eis g arug Hw EEE Rd Kh aii Hho LE 6 APPLYING THE SME DEFINITION 248 22e4e56864683ce08 25 2 eiei 7 AN OVERVIEW OF THE SME IDENTIFICATION PROCESS aaa 8 STEP 1 AMIAN ENTERPRISE eiee ern EEE ee ee 9 STEP 2 WHICH CRITERIA NEED TO BE CHECKED AND WHAT ARE THE THRESHOLDS ARTICLE 2 004 10 STEP 3 WHAT DO THESE CRITERIA MEAN ss 0 a RRR RE A 12 Criterion 1 Staff headcount Article 5 0 0 00 RRR RR 12 Criteria 2 and 3 Annual turnover and balance sheet total Article 4 15 STEP 4 HOW DO CALCULATE THESE DATA 4 6 4 Z Z dob dE E E e045 15 Am I an autonomous enterprise Article 3 1 oaa aaa aaa 16 Am pennerentemtser Aide 52 one fA oe aR EAR a EGEE 18 Am a linked enterprise Article 3 3 0 0 0 aaa a 21 R UIT ss s 2 2k ong th ces ae kB ah at ale ee Gy aed ee ae ee ee a 24 EXAMPLES sieg a wat Gop fang Fak Soe lO d 67 Ge hy pada hed oe le peas 25 BACKGROUND TO THE CURRENT SME DEFINITION AND USER GUIDE 31 GLOC SARI a aaie a ee dee ares ee e ao e a ee a 55 ANNEXES 22 44 4499 65264 5 606 hitsin 6S SS R4He ee SR ekes 57 TEXT OF THE RECOMMENDATION 2 0 RR iii RR 38 MODEL DECLARATION FORM lt X aneres a d04 e005 be bed K ee 44 USER GUIDE TO THE SME DEFINITION
21. agement gt Even in the case of a minority shareholding sole control may occur on a legal basis in situations where specific rights are attached to this shareholding i e preferential shares to which special rights are attached enabling the minority shareholder to determine the strategic commercial behaviour of the target company such as the power to appoint more than half of the members of the supervisory board or the administrative board gt Power which acquired on the basis of long term contracts leads to the control of the USER GUIDE TO THE SME DEFINITION management and resources of the undertak ing as in the case of acquisition of shares or assets such as organisation contracts under national company law or other types of con tracts e g agreements for the lease of the business giving to the acquirer control over the management and resources despite the fact that property rights or shares are not transferred gt Very important long term supply agreements or credits provided by suppliers or customers coupled with structural links may also confer decisive influence Economic activity According to Article 1 of the recommendation the SME status depends firstly on the economic activity of the entity irrespec tive of its legal form As a consequence an SME can also be self employed persons family busi nesses engaged in craft or other activities as well as partnerships or associations engaging in a
22. agraph of paragraph 2 are not involving themselves directly or indirectly in the management of the enterprise in question without prejudice to their rights as stakeholders L 124 40 EN Official Journal of the European Union 20 5 2003 Enterprises having any of the relationships described in the first subparagraph through one or more other enterprises or any one of the investors mentioned in paragraph 2 are also considered to be linked Enterprises which have one or other of such relationships through a natural person or group of natural persons acting jointly are also considered linked enterprises if they engage in their activity or in part of their activity in the same rele vant market or in adjacent markets An adjacent market is considered to be the market for a product or service situated directly upstream or downstream of the relevant market 4 Except in the cases set out in paragraph 2 second subparagraph an enterprise cannot be considered an SME if 25 or more of the capital or voting rights are directly or indirectly controlled jointly or individually by one or more public bodies 5 Enterprises may make a declaration of status as an autonomous enterprise partner enterprise or linked enterprise including the data regarding the ceilings set out in Article 2 The declaration may be made even if the capital is spread in such a way that it is not possible to determine exactly by whom it is held in wh
23. artner 60 stake and C and E are partners 40 and linked Calculation ente rp Se To calculate my data must add on one hand 38 of the cumulated data of B and D because B and D are linked and on the other hand only 38 of the data of enterprise C to the data of my enterprise do not have to take into account the data of E because this partner enterprise is not situated immediately upstream of my enterprise see page 19 Establishing which data to take into account My TOTAL 100 of A 38 of B D 38 of C My TOTAL w amp _ Linked Partner gt Stop CALCULATION 38 of B 38 of C Partner x Be ae 100 of A ae Example 3 My TOTAL 100 of B 100 of C 100 of D 100 of A of linked enterprises USER GUIDE TO TRE SME DEFINITION Situation My enterprise A has three investors B C and D each owning 20 of my capital or voting rights These investors are themselves linked to each other forming a group of linked enterprises B has a stake of 70 in C which itself has a stake of 60 in D Calculation To calculate my data at first sight my enterprise A would remain autonomous be cause each investor owns less than 25 of my enterprise But because B C and D are linked to each other as a group they own 60 of my enterprise Therefore must add 100 of the data of B Cand D to the data of my own enterprise My TOTAL 100 of A 100 of B 100 of C 100 of D
24. as sessed and potential partner or linked enterprises Case of public bodies Art 3 4 An enterprise is not an SME according to the definition if 25 or more of its capital or vot ing rights are directly or indirectly owned or con trolled jointly or individually by one or more pub lic bodies The reason for this stipulation is that public ownership may give certain advantages to enterprises notably financial over other en terprises that are financed by private capital In addition it is often not possible to calculate the relevant staff and financial data of public bodies The types of investors listed on page 17 such as universities or autonomous local authorities which have the status of a public body under na tional law are not covered by this rule The total holding by such investors in an enterprise may add up to a maximum of 50 of the enterprise s voting rights Above 50 the enterprise cannot be considered an SME HOW LO calculate My enterprise A owns 33 of C and 49 of D the data of partne r while B has a 25 stake in my business ente rp rises To calculate my headcount and financial data add the relevant percentages of the data for B C The percentages given below are purely illustrative and D to my total data For further examples see pages 25 to 29 My TOTAL 100 of A 25 of B 33 of C 49 of D My TOTAL 25 of B 100 of A My enterprise A 33 of C 49 of D
25. ated accounts no headcount data appears the calculation of it is done by adding the data from the enterprises to which the enterprise in question is linked EUR 1 000 The data entered in the Total row of the above table should be entered in line 1 of the table in the Annex to the declaration Identification of the enterprises included through consolidation Linked enterprise Address Registration Names and titles of the name identification of registered office VAT number principal director s A B C D E To be determined by the Member State according to its needs Chairman CEO Director General or equivalent Important Partner enterprises of such a linked enterprise which are not yet included through consolidation are treated like direct partners of the applicant enterprise Their data and a partnership sheet should therefore be added in Annex A In case 2 For each linked enterprise including links via other linked enterprises complete a linkage sheet and simply add together the accounts of all the linked enterprises by filling in Box B 2 below C Definition Article 6 paragraph 3 second sub paragraph USER GUIDE TO THE SME DEFINITION Box B 2 Enterprise No Headcount AWU Annual turnover Balance sheet total 1 2 3 9 4 5 Total attach one linkage sheet
26. ay s global economy Jean Claude Juncker President of the European Commission Identifying genuine SMEs pale SMEs come in many different shapes and sizes however in today s complex business environ ment they may have close financial operational or governance relationships with other enterpris es These relationships often make it difficult to precisely draw the line between an SME and a larger enterprise The SME definition is a practical tool designed to help SMEs identify themselves so that they can receive the full support of the EU and its Member States might not be eligible for WHY A EUROPEAN SME DEFINITION One of the main objectives of the SME Recom mendation is to ensure that support measures are granted only to those enterprises that gen uinely need them The SME definition therefore applies to all policies programmes and meas ures that the European Commission develops and operates for SMEs It also applies to those kinds of State Aid where there are no ad hoc guidelines applicable t Deciding whether or not a company is an SME is not as simple as one might think however 1 Not all State Aid rules adhere to the strict interpretation of the SME definition Some are directly based on it others only apply the SME definition in part and there are specific guide lines that apply in certain cases It is therefore always neces sary to carefully check the respective legal basis in case an enterprise rec
27. certain investors such as regional funds venture capital companies and business angels as well as to small local autonomous authorities for more info see page 17 gt Promoting innovation and improving access to R amp D by enabling universities and non profit esearch centres to have a financial stake in an SME for more info see page 17 gt Taking into account different relationships be tween enterprises In essence the current definition takes into ac count an SME s ability to call upon outside fi nance Enterprises that are linked to others with large financial resources for example surpass the ceilings and would not qualify for SME status DG Internal Market Industry Entrepreneurship and SMEs carries out regular monitoring of the implementation of the SME definition Building on the results of evaluations performed in 2006 and 2009 an independent study was carried out in 2012 focusing on how the SME definition works in practice Relatively minor changes in SME demographics since 2003 the policy of less and better tar geted state aid and the views of a majority of stakeholders did not justify the disruption that would be caused by any significant change to the definition Thus the 2012 study concluded that there was no need for a major revision of the SME Definition at the present time In its recommendations however the study sug gested clarifying how to apply certain rules su
28. ch as by means of further guidance or by updating the existing User guide to the SME definition To this end an evaluation of the user guide was carried out in 2013 2014 The conclusions and suggestions provided by this evaluation are reflected in this document a i 4 GR pa USER GUIDE TO THE SME DEFINITION GLOSSARY Acting jointly Within the context of links via natural persons under Article 3 3 of the Annex to the SME Recommendation family links have been considered sufficient to conclude that nat ural persons act jointly Moreover natural per sons who work together in order to exercise an influence over the commercial decisions of the enterprises concerned which precludes those en terprises from being regarded as economically independent of each other are to be regarded as acting jointly for the purposes of the fourth subparagraph of Article 3 3 of that annex irre spective of the existence of contractual relations between those persons Adjacent relevant market Adjacent markets or closely related neighbouring markets are markets where products or services are complementary to each other or when they belong to a range of prod ucts that is generally purchased by the same set of customers for the same end use Vertical relation ships in a value chain should also be taken into ac count A relevant market is understood to cover all those products and or services which are regar
29. completed simplified or adapted to take account of customary national administrative usage In order to maximise the simplification effect it would of course be desirable that the same model declaration established by a Member State be used for all administrative purposes in that Member State for which the SME qualification is required As the aim of the Recommendation is to provide a common reference framework for the definition of SMEs it would of course be counter productive if the use of such a model declaration were to lead to diverging interpretations of that definition Attention is therefore drawn to the fact that any other model declaration serving the same purpose must take account of all the provisions of the text of the Recommendation in order to determine the qualification of the applicant enterprise as a micro small or medium sized enterprise within this Recommendation s meaning It is the text of the Recommendation and not that of the declaration which sets out the conditions for the SME qualification In this regard it must be stressed that the model declaration proposed refers to the Seventh Council Directive 83 349 EEC concerning consolidated accounts Enterprises meeting one or other of the conditions set out in Article 1 of that Directive are in fact linked within the meaning of Article 3 3 of the definition of SMEs having regard to the nature of those conditions It is therefore convenient for enterprises which are obliged
30. cording to their relationship with other enterprises in terms of holdings of capital or voting rights or the right to exercise a dominant influence Type 1 Autonomous Enterprise This is by far the most common type of enterprise It applies to all enterprises which are not one of the two other types of enterprise partner or linked An applicant enterprise is autonomous if it does not have a holding of 25 C or more in any other enterprise and is not 25 or more owned by any enterprise or public body or jointly by several linked enterprises or public bodies apart from some exceptions and does not draw up consolidated accounts and is not included in the accounts of an enterprise which draws up consolidated accounts and is thus not a linked enterprise Type 2 Partner Enterprise This type represents the situation of enterprises which establish major financial partnerships with other enterprises without the one exercising effective direct or indirect control over the other Partners are enterprises which are not autonomous but which are not linked to one another The applicant enterprise is a partner of another enterprise if it has a holding or voting rights equal to or greater than 25 in the other enterprise or the other enterprise has a holding or voting rights equal to or greater than 25 in the applicant enterprise the enterprises are not linked enterprises within the meaning defined
31. ded as interchangeable or substitutable by the consum er by reason of the products characteristics their 11 Case C8 Nordbrandenburger Umesterungs Werke NUW OJ L 353 13 12 2006 p 60 12 G110 13 HaTeFo GmbH v Finanzamt Haldensleben OJ C 112 from 14 04 2014 p 15 13 See also Guidelines on the assessment of non horizontal mergers 2008 C 265 07 prices and their intended use Supply side consid erations may also play a role and the outcome of the exercise depends on the nature of the competi tion issue being examined Each case therefore has to be reviewed according to its own merits and in its own particular context Business Angel Business angels are private individuals who either solely invest their own cash in SMEs or alternatively invest in syndicates where typically one angel in the syndicate takes a lead role Angels normally have no previous family connection with the business and make their own investment decision rather than mak ing a decision through an independent manager The lead angel of the syndicate or the angel in vesting alone will typically follow the investment after it is made by observing and providing his her knowledge experience and support to the investee company by way of mentoring assis tance Consolidation Full consolidation enterprises that are included in the consolidated accounts of another enterprise by way of full consolidation are usually treated as linked enterprise
32. ded in the consolidat ed accounts of another enterprise by the equity method are usually treated as partner enter prises and for them you should provide also the standalone financial statements Dominant influence Within the context of Arti cle 3 3 the exercise of a dominant influence is presumed whenever the operating and financial policies of an enterprise are influenced in ac cordance with the wishes of another enterprise The notion of enterprise exercising a dominant influence includes public bodies private entities irrespective of their legal form as well as nat ural persons Examples of relationships which could confer dom inant influence are the following based on the Com mission Consolidat ed Jurisdic tional Notice under Council Regulation EC No 139 2004 on the control of con centrations between undertakings gt A shareholder has veto rights on strategic decisions of the enterprise though this share holder does not have the power on his own to impose such decisions The veto rights must be related to strategic decisions on the business financial policy and therefore must go beyond the veto rights normally accorded to minority shareholders in order to protect their financial interests as investors in the un dertaking Veto rights that could confer con trol typically include decisions on issues such as budget business plan major investments or appointment of the senior man
33. dwich courses it is desirable when calculating staff numbers to disregard apprentices and students with a vocational training contract Similarly maternity or parental leave periods should not be counted 16 The various types of enterprise defined according to their relationship with other enterprises correspond to objectively differing degrees of integration It is therefore appropriate to apply distinct procedures to each of those types of enterprise when calculating the quantities repre senting their activities and economic power HEREBY RECOMMENDS Article 1 1 This Recommendation concerns the definition of micro small and medium sized enterprises used in Community poli cies applied within the Community and the European Economic Area 2 Member States the European Investment Bank EIB and the European Investment Fund EIF are invited a to comply with Title of the Annex for their programmes directed towards medium sized enterprises small enter prises or microenterprises b to take the necessary steps with a view to using the size classes set out in Article 7 of the Annex especially where the monitoring of their use of Community financial instru ments is concerned Article 2 The ceilings shown in Article 2 of the Annex are to be regarded as maximum values Member States the EIB and the EIF may fix lower ceilings In implementing certain of their policies they may also choose to apply only the criter
34. e http eur lex europa eu LexUriServ LexUriServ do uri CEL EX 52007SC1719 EN HTML 20 http eur lex europa eu legal content EN TXT uri CELEX 32013R0345 USER GUIDE TO THE SME DEFINITION ANNEXES 38 L 124 36 EN TEXT OF THE RECOMMENDATION Official Journal of the European Union 20 5 2003 COMMISSION COMMISSION RECOMMENDATION of 6 May 2003 concerning the definition of micro small and medium sized enterprises notified under document number C 2003 1422 Text with EEA relevance 2003 361 EC THE COMMISSION OF THE EUROPEAN COMMUNITIES Having regard to the Treaty establishing the European Community and in particular Article 211 second indent thereof Whereas 1 U OJ oJ In a report submitted to the Council in 1992 at the request of the Industry Council held on 28 May 1990 the Commission had proposed limiting the proliferation of definitions of small and medium sized enterprises in use at Community level Commission Recommendation 96 280 EC of 3 April 1996 concerning the definition of small and medium sized enterprises was based on the idea that the existence of different definitions at Commu nity level and at national level could create inconsisten cies Following the logic of a single market without internal frontiers the treatment of enterprises should be based on a set of common rules The pursuit of such an approach is all the more necessary in view of t
35. eives State support Size isn t everything In determining whether or not an enterprise is an SME the en terprise s size employees turnover and balance sheet total is not the only factor Q that should be taken into ac count In fact an enterprise can be very small in these terms but S if it has access to significant additional resources e g because it is owned by linked to or partnered with a larger enterprise it might not be eligible for SME status For enterprises with a more complex structure a case by case analysis may therefore be required to ensure that only those enterprises that fall within the spirit of the SME Recommen dation are considered SMEs SME vs Non SME the main criteria SIZE If an enterprise has access to significant E Ployees additional resources it Turnover e Balance sheet total SME status RESOURCES e Ownership Partnerships e Linkages USER GUIDE TO THE SME DEFINITION Helping to avoid competitive distortion In a single market with no internal frontiers and in an increasingly globalized business environment it is essential that measures in support of SMEs are based on a common definition Lack of a common definition could lead to the uneven application of policies and thus distort competition across Member States An enterprise in one Member State for example might be eligible for aid while an enterprise in another Member State of exactly the sa
36. en the need for on whether they are autonomous whether they have legal certainty it is considered necessary to confirm that holdings which do not entail a controlling position an enterprise with 25 or more of its capital or voting partner enterprises or whether they are linked to other rights controlled by a public body is not an SME enterprises The current limit shown in Recommendation 96 280 EC of a 25 holding below which an enterprise is considered autonomous is maintained 14 In order to ease the administrative burden for enter prises and to simplify and speed up the administrative handling of cases for which SME status is required it is appropriate to allow enterprises to use solemn declara 10 In order to encourage the creation of enterprises equity tions to certify certain of their characteristics financing of SMEs and rural and local development enterprises can be considered autonomous despite a ee holding of 25 or more by certain categories of inves K aa 2710 2001 p 28 tors who have a positive role in business financing and OJ L 222 14 8 1978 p 11 creation However conditions for these investors have OJ C 372 9 12 1997 p 5 40 L 124 38 EN Official Journal of the European Union 20 5 2003 15 Itis necessary to establish in detail the composition of the staff headcount for SME definition purposes In order to promote the development of vocational training and san
37. ependent lt 25 My enterprise holds less than 25 capital or voting rights in another sse eee eee eee e DH And or eC Definition An enterprise is autonomous if gt It is totally independent i e it has no partici pation in other enterprises and gt No enterprise has a participation in it Or gt It has a holding of less than 25 of the capi tal or voting rights whichever is higher in one or more other enterprises and or gt Any external parties have a stake of no more than 25 of the capital or voting rights whichever is higher in the enterprise Or gt It is not linked to another enterprise through a natural person in the sense of Art 3 3 My enterprise USER GUIDE TO THE SME DEFINITION Establishing the data to gt Universities and non profit research centres consider Art 6 1 gt Institutional investors including regional de velopment funds If an enterprise is autonomous it uses only the number of employees and the financial data con tained in its annual accounts to check if it respects the thresholds mentioned in Art 2 of the definition Exceptions Art 3 2 a d gt Autonomous local authorities with an annual budget of less than 10 million euro and fewer than 5 000 inhabitants One or more of the above investors may indi vidually have a stake of up to 50 in an enter prise provided they are not linked either indi vidually or
38. eplace the Recommendation It should also be made clear that in accordance with Articles 48 81 and 82 of the Treaty as interpreted by the Court of Justice of the European Communities an enterprise should be considered to be any entity regard less of its legal form engaged in economic activities including in particular entities engaged in a craft activity and other activities on an individual or family basis partnerships or associations regularly engaged in economic activities The criterion of staff numbers the staff headcount criterion remains undoubtedly one of the most impor tant and must be observed as the main criterion intro ducing a financial criterion is nonetheless a necessary adjunct in order to grasp the real scale and performance of an enterprise and its position compared to its compe titors However it would not be desirable to use turn over as the sole financial criterion in particular because enterprises in the trade and distribution sector have by their nature higher turnover figures than those in the manufacturing sector Thus the turnover criterion should be combined with that of the balance sheet total a criterion which reflects the overall wealth of a business with the possibility of either of these two criteria being exceeded The turnover ceiling refers to enterprises engaged in very different types of economic activity In order not to restrict unduly the usefulness of applying the definition
39. er with the European Investment Bank EIB and tion or they may lack the resources to comply the European Investment Fund EIF to apply it with environmental regulations as widely as possible gt Structural barriers SMEs often must also overcome structural barriers such as a lack of management and technical skills rigidities in labour markets and a limited knowledge of opportunities for international expansion THE OBJECTIVES OF THIS GUIDE The information contained in this guide is primar ily designed for two audiences gt Entrepreneurs entrepreneurs running mi cro small or medium sized enterprises who are interested in applying for grants or loans aimed at SMEs These entrepreneurs may also want to know if they satisfy the criteria to benefit from specific legislative provisions or reduced fees for SMEs gt Government officials European national regional and local officials who draw up and run the various schemes process the applica tions and ensure that companies satisfy the eligibility criteria for support The guide explains step by step how to deter mine if an enterprise can qualify as an SME It also contains a glossary of terms used in the definition or its practical implementation as well as a model self assessment form The form gives an overview of the data that an enterprise has to provide when applying for SME support and can be used by administrative departments to establish a company
40. eria 2 and 3 Annual turnover and balance sheet total Article 4 Annual turnover Annual turnover is determined by calculating the income that an enterprise received during the year in question from the sale of products and provi sion of services falling within the company s ordi nary activities after deducting any rebates Turn over should not include value added tax VAT or other indirect taxes 3 See Article 28 of Council Directive 78 660 EEC of 25 July 1978 based on Article 54 3 g of the Treaty on the annual accounts of certain types of companies Official Journal L 222 14 08 1978 P 0011 0031 Annual balance sheet total The annual balance sheet total refers to the val ue of a company s main assets 4 4 For more details see Article 12 3 of Council Directive 78 660 EEC of 25 July 1978 based on Article 54 3 g of the Treaty on the annual accounts of certain types of companies Official Journal L 222 14 08 1978 P 0011 0031 Chapter 2 What happens if go above a particular threshold Article 4 2 provides stability and certainty to companies that are close to the ceilings and risk exceeding them temporarily during an exceptional year and or in volatile markets Thus if an enterprise exceeds the headcount or financial ceilings during the course of the reference year this will not affect its situation and it will retain the SME status with which it began the accounting year However it will
41. erprise in the declaration ANNEXA Partner enterprises For each enterprise for which a partnership sheet has been completed one sheet for each partner enterprise of the applicant enterprise and for any partner enterprises of any linked enterprise of which the data is not yet included in the consolidated accounts of that linked enterprise the data in the partnership box in question should be entered in the summary table below Box A Partner enterprise Headcount AWU Annual turnover Balance sheet total name identification T 5 3 4 5 6 7 Total EUR 1 000 attach sheets or expand the present table if necessary Reminder This data is the result of a proportional calculation done on the partnership sheer for each direct or indirect partner enterprise The data entered in the Total row of the above table should be entered in line 2 regarding partner enterprises of the table in the Annex to the declaration USER GUIDE TO TRE SME DEFINITION PARTNERSHIP SHEET 1 Precise identification of the partner enterprise Name or business T Address of registered office TTT Registration VAT number sessessssssssessessessessessecucsecsucsucsnssessessecuesuccaesucsucsusaussusaesaeeaeeneeuceuecueeneaneasens Names and titles of the principal director s CH seene 2 Raw data regarding that partner enterprise
42. g of cases requiring qualification as a micro small or medium sized enterprise To this end offering enterprises the possibility to complete themselves a concise declaration was considered a modern and convenient method This declaration could if necessary be completed on line and could also function as a practical users manual for enterprises The document attached to this Communication is a model for such a declaration It is in no way mandatory as regards its use or content either for enterprises or for the administrations of the Member States but is designed as one possible example amongst others Such declarations are without prejudice to the checks or investigations provided for under national or Community rules JOL 124 of 20 05 2003 p 36 Commission Decision 2000 690 EC of 8 November 2000 setting up an Enterprise Policy Group OJ L 285 of 10 11 2000 p 24 USER GUIDE TO THE SME DEFINITION If those Member States using the definition of SMEs wish to speed up the processing of administrative files it would of course be desirable for this declaration not to increase the overall administrative burden on enterprises but to replace whenever possible other requests for information previously required Also it could be preferably incorporated into the files relating to applications to take part in measures for which SME qualification is required To this end the model can be used in the form proposed in the annex It can also be
43. h 2 4 Where in the consolidated accounts no staff data appear for a given enterprise staff figures are calculated by aggre gating proportionally the data from its partner enterprises and by adding the data from the enterprises to which the enterprise in question is linked TITLE II SUNDRY PROVISIONS Article 7 Statistics The Commission will take the necessary measures to present the statistics that it produces in accordance with the following size classes of enterprises a 0 to 1 person b 2 to 9 persons c 10 to 49 persons d 50 to 249 persons Article 8 References 1 Any Community legislation or any Community programme to be amended or adopted and in which the term SME microenterprise small enterprise or medium sized enterprise or any other similar term occurs should refer to the definition contained in this Recommendation 2 As a transitional measure current Community programmes using the SME definition in Recommendation 96 280 EC will continue to be implemented for the benefit of the enterprises which were considered SMEs when those programmes were adopted Legally binding commitments entered into by the Commission on the basis of such programmes will remain unaffected Without prejudice to the first subparagraph any amendment of the SME definition within the programmes can be made only by adopting the definition contained in this Recommendation in accordance with paragraph 1 Art
44. he applicant enterprise persons working for the enterprise being subordinate to it and considered to be employees under national law owner managers partners engaging in a regular activity in the enterprise and benefiting from financial advantages from the enterprise Apprentices or students engaged in vocational training with an apprenticeship or vocational training contract are not taken into account in the headcount How is the headcount calculated One AWU corresponds to one person who worked full time in the enterprise in question or on its behalf during the entire reference year The headcount is expressed in AWUs The work of persons who did not work the entire year or who worked part time regardless of its duration and seasonal work is counted as fractions of AWU The duration of maternity or parental leaves is not counted Seventh Council Directive 83 349 EEC of 13 June 1983 based on Article 54 3 g of the Treaty and concerning consolidated accounts OJ L 193 of 18 7 1983 p 1 as last amended by Directive 2001 65 EC of the European Parliament and of the Council OJ L 283 of 27 10 2001 p 28 Definition Article 5 USER GUIDE TO THE SME DEFINITION ANNEX TO THE DECLARATION CALCULATION FOR THE PARTNER OR LINKED TYPE OF ENTERPRISE Annexes to be enclosed if necessary 49 Annex A if the applicant enterprise has at least one partner enterprise and any additional sheets Annex
45. he exten sive interaction between national and Community measures assisting micro small and medium sized enter prises SME for example in connection with Structural Funds or research It means that situations in which the Community focuses its action on a given category of SMEs and the Member States on another must be avoided In addition it was considered that the applica tion of the same definition by the Commission the Member States the European Investment Bank EIB and the European Investment Fund EIF would improve the consistency and effectiveness of policies targeting SMEs and would therefore limit the risk of distortion of competition Recommendation 96 280 EC has been applied widely by the Member States and the definition contained in the Annex thereto has been taken over in Commission Regulation EC No 70 2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium sized enterprises Apart from the need to adapt Recommendation 96 280 EC to L 107 30 4 1996 p 4 L 10 13 1 2001 p 33 economic developments pursuant to Article 2 of the Annex thereto consideration must be given to a number of difficulties of interpretation which have emerged in its application as well as the observations received from enterprises In view of the number of amendments now requiring to be made to Recommendation 96 280 EC and for the sake of clarity it is appropriate to r
46. ich case the enterprise may declare in good faith that it can legitimately presume that it is not owned as to 25 or more by one enterprise or jointly by enter prises linked to one another Such declarations are made without prejudice to the checks and investigations provided for by national or Community rules Article 4 Data used for the staff headcount and the financial amounts and reference period 1 The data to apply to the headcount of staff and the financial amounts are those relating to the latest approved accounting period and calculated on an annual basis They are taken into account from the date of closure of the accounts The amount selected for the turnover is calculated excluding value added tax VAT and other indirect taxes 2 Where at the date of closure of the accounts an enterprise finds that on an annual basis it has exceeded or fallen below the headcount or financial ceilings stated in Article 2 this will not result in the loss or acquisition of the status of medium sized small or microenterprise unless those ceilings are exceeded over two consecutive accounting periods 3 In the case of newly established enterprises whose accounts have not yet been approved the data to apply is to be derived from a bona fide estimate made in the course of the financial year Article 5 Staff headcount The headcount corresponds to the number of annual work units AWU i e the number of persons who worked full time within the enter
47. icle 9 Revision On the basis of a review of the application of the definition contained in this Recommendation to be drawn up by 31 March 2006 and taking account of any amendments to Article 1 of Directive 83 349 EEC on the definition of linked enterprises within the meaning of that Directive the Commission will if necessary adapt the definition contained in this Recommendation and in particular the ceilings for turnover and the balance sheet total in order to take account of experience and economic developments in the Community 44 MODEL DECLARATION FORM Commission communication Model declaration on the information to the qualification of an enterprise as an SME consolidated version This Communication aims to promote the application of Commission Recommendation 2003 361 EC C on the definition of SMEs which replaces Recommendation 96 280 EC of 3 April 1996 There are some 20 million micro small and medium sized enterprises in the European Economic Area They are a major source of jobs and a challenge for competitiveness Their ability to identify new needs of both end consumers and industrial operators their potential for absorbing new technologies and their contribution to apprenticeship vocational training and local development govern future advances in productivity of the entire European Union and its ability to achieve the objectives set at the Lisbon European Council The responsibility of local national and Community
48. in the first subparagraph are added the data of any partner enterprise of the enterprise in ques tion situated immediately upstream or downstream from it Aggregation is proportional to the percentage interest in the capital or voting rights whichever is greater In the case of cross holdings the greater percentage applies To the data referred to in the first and second subparagraph is added 100 of the data of any enterprise which is linked directly or indirectly to the enterprise in question where the data were not already included through consolidation in the accounts 3 bor the application of paragraph 2 the data of the partner enterprises of the enterprise in question are derived from their accounts and their other data consolidated if they exist To these is added 100 of the data of enterprises which are linked to these partner enterprises unless their accounts data are already included through consolidation For the application of the same paragraph 2 the data of the enterprises which are linked to the enterprise in question are to be derived from their accounts and their other data consolidated if they exist To these is added pro rata the data of any possible partner enterprise of that linked enterprise situated immediately upstream or downstream from it unless it has already been included in the consolidated accounts with a percentage at least proportional to the percentage iden tified under the second subparagraph of paragrap
49. ion of number of employees except in fields governed by the various rules on State aid Article 3 This Recommendation will replace Recommendation 96 280 EC as from 1 January 2005 Article 4 This Recommendation is addressed to the Member States the EIB and the EIF They are requested to inform the Commission by 31 December 2004 of any measures they have taken further to it and no later than 30 September 2005 to inform it of the first results of its implementation Done at Brussels 6 May 2003 For the Commission Erkki LIIKANEN Member of the Commission 20 5 2003 USER GUIDE TO THE SME DEFINITION EN Official Journal of the European Union L 124 39 ANNEX TITLE I DEFINITION OF MICRO SMALL AND MEDIUM SIZED ENTERPRISES ADOPTED BY THE COMMISSION Article 1 Enterprise An enterprise is considered to be any entity engaged in an economic activity irrespective of its legal form This includes in particular self employed persons and family businesses engaged in craft or other activities and partnerships or asso ciations regularly engaged in an economic activity Article 2 Staff headcount and financial ceilings determining enterprise categories 1 The category of micro small and medium sized enterprises SMEs is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million and or an annual balance sheet total not exceeding EUR 43 milli
50. it it cannot be considered an SME Included in staff headcount The staff headcount criterion covers full time part time temporary and seasonal staff and in cludes the following gt Employees gt Persons working for the enterprise who have been seconded to it and are considered to be employees under national law this can also include temporary or so called interim em ployees gt Owner managers gt Partners engaged in a regular activity in the enterprise and deriving financial advantages from the enterprise Not included in staff headcount gt Apprentices or students who are engaged in vocational training and have apprenticeship or vocational training contracts gt Employees on maternity or parental leave What is the definition of an employee National labour rules apply These vary from country to country for instance for temporary staff working as independent contractors or on hire from an interim employment agency You should contact your own authorities to establish how your national legislation defines the term employee USER GUIDE TO THE SME DEFINITION Measuring staff headcount Basic headcount is expressed in annual work units AWU Anyone who worked full time within an enterprise or on its behalf during the entire reference year counts as one unit Part time staff seasonal workers and those who did not work the full year are treated as fractions of one unit Crit
51. jointly to the enterprise in question see page 21 Am a linked enterprise for the notion of linked enterprise An enterprise may still be considered autonomous and thus as not having any partner enterprises even if the 25 threshold is reached or exceeded by any of the following types of investors gt Public investment corporations venture capi tal companies and business angels 9 See glossary The financial involvement of business angels in the same enterprise must be below 1 250000 euro EXCEPTION AN ENTERPRISE CAN STILL BE RANKED AS AUTONOMOUS IF ANY OF THE FOLLOWING TYPES OF INVESTOR HOLDS 25 50 OF ITS CAPITAL OR VOTING RIGHTS Am a partner enterprise Article 3 2 This type of relationship describes the situation of enterprises that establish certain financial partnerships with other enterprises without one exercising effective direct or indirect control over the other Partners are enterprises that are nei ther autonomous nor linked to one another Definition An enterprise is a partner enterprise if gt The enterprise has a holding equal to or great er than 25 of the capital or voting rights in another enterprise and or another enterprise has a holding equal to or greater than 25 in the enterprise in question and gt The enterprise is not linked to another en terprise see page 21 Am a linked enter prise This means among other things that the enterprise s voti
52. l clarify the possible relationships between enterprises and the ex tent to which they have to be taken into account in the SME calculation AN OVERVIEW OF THE SME IDENTIFICATION PROCESS The process of determining whether or not an enterprise is an SME consists of four steps Step 1 Am an enterprise The first step to qualify as an SME is to be considered an enterprise Step 2 Which criteria need to be checked and what are the thresholds The second step is to identify the qualifying criteria and thresholds to apply Step 3 What do these criteria cover The third step is to interpret the meaning of the various criteria and correctly apply them Step 4 How do calculate these data The fourth step is to identify which data need to be considered and assessed against the thresholds and in which quantities or proportions For this purpose an enterprise must first establish whether it is an autonomous enterprise a partner enterprise or a linked enterprise Am I an enterprise Article 1 The first step to qualify as an SME is to be con sidered an enterprise According to the definition an enterprise is any entity engaged in an economic activity irrespec tive of its legal form This wording reflects the terminology used by the European Court of Jus tice in its judgments It is the economic activity that is the determining factor not the legal form Step In practice this means
53. le for enabling pooled investment by a number of in vestors in the equity and equity related securities such as quasi equity of companies investee companies These are generally private compa nies whose shares are not quoted on any stock exchange The fund can take the form either of a company or of an unincorporated arrangement such as a limited partnership In form a private equity venture capital company can either be a company or a limited partnership a few are 18 http eur lex europa eu legal content EN TXT PD F uriz CELEX 32013RO345 amp from EN REGULATION EU No 345 2013 OF THE EUROPEAN PARLIA MENT AND OF THE COUNCIL of 17 April 2013 on European venture capital funds quoted on stock markets 1 Venture capital com panies invest with the intention to participate in the growth of shareholder value by making a profitable exit i e sale of the shares This should be included in the statutes Corporate venture capital companies are considered ordinary companies e g in the pharmaceutical transport energy sectors etc that choose as an ancillary activity to invest money into another company usually a start up while continuing their core activity They are therefore not the type of investors considered in the context of Article 3 2 a d This line of thought is supported by Regulation 345 2013 on European venture capital funds where cor porate venture capital would not be eligible for the EuVECA label 19 Se
54. me size and structure might not be eligible A common definition helps to improve the consistency and effectiveness of SME policy across the EU Moreover it is all the more necessary given the extensive interactions between national and EU measures designed to help SMEs in areas such as regional development and research funding SMEs require assistance that other enterprises do not A unique set of issues It is also important to identify which enterprises Given the relative scarcity of funds it is impor truly are SMEs because SMEs require assistance tant to reserve the advantages of SME support that other enterprises do not Compared with programmes for genuine SMEs With this in other enterprises SMEs are confronted with a mind the definition includes several an unique set of issues ti circumvention measures The simpli fied approach of the present guide should not be used to justify the creation of artificial corporate structures that aim to bypass the definition gt Market failures real SMEs often face market failures that make the environment in which they operate and compete with other players more challenging Market failures may occur in areas such as finance especially venture capital research innovation or environmen Eor Member States use of the definition is vol al regulations SMEs may be unable to ac untary but the Commission invites them togeth cess finance or invest in research and innova
55. mpany gt Any company linked to it gt Any company linked to any of its partners gt Any of the companies linked to its linked com panies gt Any of the partners to the linked companies Partner partner relationships are not to be con sidered The examples on pages 25 29 illustrate the cal culation in more complex situations What about the data of a partner s partner To avoid complicated and endless calculations the definition includes the rule that when a partner enterprise itself has other partners only the data of the partner enterprise s situated immediately upstream or downstream need to be taken into account see Art 6 2 on page 41 and example 2 on page 27 What if a partner is linked to another enterprise In this case 100 of the data of the linked enterprise must be included in the data of the partner enterprise see page 21 Am a linked enterprise The enterprise in question should then include in its own data the percentage equal to the holding of the partner enterprise see Art 6 3 on page 41 and page 22 How to calculate the data of linked enterprises CONCLUSION The European Commission believes that the SME definition is an important tool for implementing efficient measures and programmes to support the development and success of SMEs It there fore invites Member States together with the European Investment Bank and the European In vestment Fund
56. n economic activity on a regular basis In gener al any activity consisting in the offering of goods or services on a given market for remuneration or financial interest is considered an economic activity The following shall not be considered economic activities gt Activities which do not entail some sort of pecuniary offset e g grants subventions and donations or gt Activities for which there is no given direct market or gt Activities for which the income generated is not distinct from the personal income of its members or shareholders 16 20 FP7 Rules for participation http ec europa eu research par ticipants data ref fp7 100581 fp7 verification rules_EN pdf Estimate of relevant data A declaration in cluding a bona fide estimate in the form of a business plan made in the course of the finan cial year This business plan should cover the en tire period financial years until the entity gener ates turnover Financial projections concerning the Profit amp Loss Account Balance Sheet and forecasted Head count of the Company together with a narrative part describing the core activity of the company and its expected market position should be con sidered as minimal requirements of the business plan The document should be dated and signed by a person entitled to engage the company Institutional investors The European Commis sion does not formally define the concept of in stitutional i
57. ng rights in the other en terprise or vice versa do not exceed 50 Examples provided as of page 25 involving indirect partners are PARTNER ENTERPRISES or gt 25 My enterprise holds minimum 25 capital or T voting rights in another pe or gt 25 USER GUIDE TO THE SME DEFINITION Establishing which data to take into account Art 6 2 6 3 and 6 4 With respect to partner enterprises the enter prise in question must add a proportion of its partner s staff headcount and financial data to its own when determining its eligibility for SME status This proportion will reflect the percent age of shares or voting rights whichever is the higher that are held For example if an enterprise has a 30 stake in an other enterprise it adds 30 of the partner enterpris es headcount turnover and balance sheet total to its own figures If there are several partner enterprises the same type of calculation must be done for each partner enterprise situated immediately upstream or downstream from the enterprise in question In addition the proportionate data of any en terprise that is linked to any of an enterprise s partners need to be taken into account Data of a partner to a partner however are not to be con sidered See example 2 on page 26 Further data may be required on a case by case basis e g consolidation by equity to establish the relationships between the enterprise to be
58. nvestors They are however usually seen as investors which trade large volumes of securities on behalf of a great number of indi vidual small investors and which have no direct involvement in the management of the firms in which they invest The term institutional inves tor refers mainly to insurance companies pen sion funds banks and investment companies that collect savings and supply funds to the markets but the term also applies to other types of institutional wealth e g endowment funds foundations etc Usually these have substantial assets and are experienced investors Venture capital Venture capital is typically pro vided to finance undertakings that are very small that are in the initial stages of their corporate existence and that display a strong potential for growth and expansion In addition venture capital funds provide undertakings with valuable exper tise and knowledge business contacts brand equity and strategic advice By providing finance and advice to those undertakings venture capi tal funds stimulate economic growth contribute 17 See COM 2007 853 final to the creation of jobs and capital mobilisation foster the establishment and expansion of inno vative undertakings increase their investment in research and development and foster entrepre neurship innovation and competitiveness Venture capital company A private equity venture capital investment fund is a vehic
59. ol of the majority of the voting rights including through agreements or in certain cases through natural persons as shareholders or through the ability to exercise a dominant influence on an enterprise Such cases are thus less frequent than the two preceding types In order to avoid difficulties of interpretation for enterprises the Commission has defined this type of enterprise by taking over wherever they are suitable for the purposes of the Definition the conditions set out in Article 1 of Council Directive 83 349 EEC on consolidated accounts which has been applied for many years An enterprise thus generally knows immediately that it is linked since it is already required under that Directive to draw up consolidated accounts or is included by consolidation in the accounts of an enterprise which is required to draw up such consolidated accounts The only two cases which are however not very frequent in which an enterprise can be considered linked although it is not already required to draw up consolidated accounts are described in the first two indents of endnote 5 of this explanatory note In those cases the enterprise should check whether it meets one or other of the conditions set out in Article 3 paragraph 3 of the Definition II THE HEADCOUNT AND THE ANNUAL WORK UNITS The headcount of an enterprise corresponds to the number of annual work units AWU Who is included in the headcount The employees of t
60. on 2 Within the SME category a small enterprise is defined as an enterprise which employs fewer than 50 persons and whose annual turnover and or annual balance sheet total does not exceed EUR 10 million 3 Within the SME category a microenterprise is defined as an enterprise which employs fewer than 10 persons and whose annual turnover and or annual balance sheet total does not exceed EUR 2 million Article 3 Types of enterprise taken into consideration in calculating staff numbers and financial amounts 1 An autonomous enterprise is any enterprise which is not classified as a partner enterprise within the meaning of paragraph 2 or as a linked enterprise within the meaning of paragraph 3 2 Partner enterprises are all enterprises which are not classified as linked enterprises within the meaning of para graph 3 and between which there is the following relationship an enterprise upstream enterprise holds either solely or jointly with one or more linked enterprises within the meaning of paragraph 3 25 or more of the capital or voting rights of another enterprise downstream enterprise However an enterprise may be ranked as autonomous and thus as not having any partner enterprises even if this 25 threshold is reached or exceeded by the following investors provided that those investors are not linked within the meaning of paragraph 3 either individually or jointly to the enterprise in question a public investment co
61. one or more mi nority partnerships each less than 25 with other enterprises see page 16 Am an au tonomous enterprise gt Partner if holdings with other enterprises rise to at least 25 but no more than 50 the relationship is deemed to be between partner enterprises see page 18 Am a partner enterprise gt Linked enterprise if holdings with other en terprises exceed the 50 threshold these are considered linked enterprise see page 21 Am a linked enterprise Control An important notion in the SME definition is the concept of control both legal and de facto Control determines whether or not an enterprise is considered a partner or a linked enterprise It is not only the capital or shareholdings but also the control that one enterprise has over another that needs to be assessed Making an SME calculation Depending upon the category in which an enter prise fits it may have to include data from one or more other enterprises when making the SME calculation The result of the calculation will al low the enterprise to check whether it complies with the staff headcount and at least one of the financial thresholds set by the definition see page 10 Which criteria need to be checked and what are the thresholds and page 15 How do calcu late these data Enterprises that exceed these thresholds are not considered SMEs Starting from page 25 some useful examples wil
62. ovided for an exception to the requirement to draw up such accounts pursuant to the Seventh Council Directive 83 349 EEC of 13 June 1983 the enterprise should nevertheless check specifically whether it does not meet one or other of the conditions laid down in Article 3 paragraph 3 of the Definition There are also some very rare cases in which an enterprise may be considered linked to another enterprise through a person or a group of natural persons acting jointly Definition Article 3 paragraph 3 Conversely there are very few cases of enterprises drawing up consolidated accounts voluntarily without being required to do so under the Seventh Directive In that case the enterprise is not necessarily linked and can consider itself only a partner To determine whether the enterprise is linked or not in each of the three situations it should be checked whether or not the enterprise meets one or other of the conditions laid down in Article 3 paragraph 3 of the Definition where applicable through a natural person or group of natural persons acting jointly 47 and the applicant enterprise does not draw up consolidated accounts which include the other enterprise by consolidation and is not included by consolidation in the accounts of the other enterprise or of an enterprise linked to it Type 3 Linked Enterprise This type corresponds to the economic situation of enterprises which form a group through the direct or indirect contr
63. prise in question or on its behalf during the entire reference year under consideration The work of persons who have not worked the full year the work of those who have worked part time regardless of duration and the work of seasonal workers are counted as fractions of AWU The staff consists of a employees b persons working for the enterprise being subordinated to it and deemed to be employees under national law c owner managers d partners engaging in a regular activity in the enterprise and benefiting from financial advantages from the enterprise Apprentices or students engaged in vocational training with an apprenticeship or vocational training contract are not included as staff The duration of maternity or parental leaves is not counted Article 6 Establishing the data of an enterprise 1 In the case of an autonomous enterprise the data including the number of staff are determined exclusively on the basis of the accounts of that enterprise 20 5 2003 USER GUIDE TO THE SME DEFINITION EN Official Journal of the European Union 43 L 124 41 2 The data including the headcount of an enterprise having partner enterprises or linked enterprises are determined on the basis of the accounts and other data of the enterprise or where they exist the consolidated accounts of the enter prise or the consolidated accounts in which the enterprise is included through consolidation To the data referred to
64. quivalent Tf the data of an enterprise are included in the consolidated accounts to a lesser proportion than the one determined under Article 6 paragraph 2 the percentage rate according to that article should be applied Definition Article 6 paragraph 3 second sub paragraph HOW TO OBTAIN EU PUBLICATIONS Free publications e one copy via EU Bookshop http bookshop europa eu e more than one copy or posters maps from the European Unions representations http ec europa eu represent_en htm from the delegations in non EU countries http eeas europa eu delegations index_en htm by contacting the Europe Direct service http europa eu europedirect index_en htm or calling 0080067891011 freephone number from anywhere in the EU The information given is free as are most calls though some operators phone boxes or hotels may charge you Priced publications e via EU Bookshop http bookshop europa eu HOW TO OBTAIN OECD PUBLICATIONS The OECD library http www oecd ilibrary org e The OECD Bookshop online http www oecdbookshop org Publications Office
65. rporations venture capital companies individuals or groups of individuals with a regular venture capital investment activity who invest equity capital in unquoted businesses business angels provided the total investment of those business angels in the same enterprise is less than EUR 1 250 000 b universities or non profit research centres c institutional investors including regional development funds d autonomous local authorities with an annual budget of less than EUR 10 million and fewer than 5 000 inhabitants 3 Linked enterprises are enterprises which have any of the following relationships with each other a an enterprise has a majority of the shareholders or members voting rights in another enterprise b an enterprise has the right to appoint or remove a majority of the members of the administrative management or supervisory body of another enterprise c an enterprise has the right to exercise a dominant influence over another enterprise pursuant to a contract entered into with that enterprise or to a provision in its memorandum or articles of association d an enterprise which is a shareholder in or member of another enterprise controls alone pursuant to an agreement with other shareholders in or members of that enterprise a majority of shareholders or members voting rights in that enterprise There is a presumption that no dominant influence exists if the investors listed in the second subpar
66. s 14 Commission Notice on the definition of the relevant market for the purposes of Community competition law see OJ C 372 9 12 1997 p 5 13 15 Report of the chairman of the expert group on the cross bor der matching of innovative firms with suitable investors p 15 http bookshop europa eu en report of the chair man of the expert group on the cross border match ing of innovative firms with suitable investors pbN B3212296 pgid Iq1 EkniO 1ISROOOK4MycOSBOOO00 Ir_Od Q4l sid Plq_3KyOL3q_1fhMLz4he86r0YmSD6tdOlk Cat alogCategoryID CSgkABstvcoAAAEjZJEY4e5L Method of proportionate con solidation usually used for the consolidation of a jointly controlled entity The balance sheet of each consolidating party includes its share of the assets that it con trols jointly and its share of the liabilities for which it is jointly responsible The income statement includes its share of the income and expenses of the jointly controlled entity Those enterprises that are included in the consolidat ed accounts of another enterprise by the way of proportionate consolidation are usually treated as partner enterprises Their separate standalone financial statements should be provided Equity method of consolidation an equity in vestment is initially recorded as cost and is sub sequently adjusted to reflect the investor s share of the net profit or loss of the associate Those enterprises that are inclu
67. sion Recommendation 2003 361 EC on the SME definition Reference period Headcount AWU Annual turnover Balance sheet total All data must be relating to the last approved accounting period and calculated on an annual basis In the case of newly established enterprises whose accounts have not yet been approved the data to apply shall be derived from a reliable estimate made in the course of the financial year EUR 1 000 Important O No Compared to the previous accounting period there is a change regarding the data which could result in a change O Yes in this case fill in and attach a of category of the applicant enterprise micro small declaration regarding the previous medium sized or big enterprise accounting period Signature Name and position of the signatory being authorised to represent the enterprise sss I declare on my honour the accuracy of this declaration and of any annexes thereto Done at Signature To be determined by the Member State according to its needs Chairman CEO Director General or equivalent Definition Article 4 paragraph 2 of the annex to Commission Recommendation 2003 361 EC USER GUIDE TO THE SME DEFINITION EXPLANATORY NOTE ON THE TYPES OF ENTERPRISES TAKEN INTO ACCOUNT FOR CALCULATING THE HEADCOUNT AND THE FINANCIAL AMOUNTS I TYPES OF ENTERPRISES The definition of an SME distinguishes three types of enterprise ac
68. st be chosen for those categories 11 To simplify matters in particular for Member States and for the turnover ceiling and balance sheet total ceiling enterprises use should be made when defining linked enterprises of the conditions laid down in Article 1 of Council Directive 83 349 EEC of 13 June 1983 based on Article 54 3 g of the Treaty on consolidated accounts as last amended by Directive 2001 65 EC of the European Parliament and of the Council in so far 7 As in Recommendation 96 280 EC the financial ceilings as these conditions are suitable for the purposes of this and the staff ceilings represent maximum limits and the Recommendation To strengthen the incentives for Member States the EIB and the EIF may fix ceilings investing in the equity funding of an SME the presump lower than the Community ceilings if they wish to direct tion of absence of dominant influence on the enterprise their measures towards a specific category of SME In in question was introduced in pursuance of the criteria the interests of administrative simplification the Member of Article 5 3 of Council Directive 78 660 EEC of 25 States the EIB and the EIF may use only one criterion July 1978 based on Article 54 3 g of the Treaty on the the staff headcount for the implementation of some annual accounts of certain types of companies as last of their policies However this does not apply to the amended by Directive 2001 65 EC various
69. that the self employed family firms partnerships and associations or any other entity that is regularly engaged in an eco nomic activity may be considered as enterprises An economic activity is usually seen as the sale of products or services at a given price on a giv en direct market Which criteria need to be checked and what are Step the thresholds Article 2 The SME definition takes into account the follow ing three criteria gt Staff headcount gt Annual turnover gt Annual balance sheet total And Staff headcount Employ lt 250 persons The category of micro small and medium sized enterprises consists of enterprises which gt Employ fewer than 250 persons and gt Have either an annual turnover not exceeding 50 million euro OR an annual balance sheet total not exceeding 43 million euro Annual turnover lt or 50 Million EUR or Balance sheet total lt or 43 Million EUR USER GUIDE TO THE SME DEFINITION Meeting the staff headcount criterion is mandato ry in order to be considered an SME However an enterprise may choose to meet either the turno ver or balance sheet total ceiling It does not need to satisfy both requirements and may exceed one of them without impact on its SME status The definition offers the above choice since by their nature enterprises in the trade and distri bution sectors have higher turnover figures than
70. those in manufacturing Providing an option between this criterion and the balance sheet to tal which reflects the overall wealth of an en terprise ensures that SMEs engaged in different types of economic activity are treated fairly By comparing its data with the thresholds for the three criteria an enterprise can determine wheth er it is a micro small or medium sized enterprise gt Micro enterprises are defined as enterpris es that employ fewer than 10 persons and whose annual turnover or annual balance sheet total does not exceed 2 million euro gt Small enterprises are defined as enterpris es that employ fewer than 50 persons and whose annual turnover or annual balance sheet total does not exceed 10 million euro gt Medium sized enterprises are defined as enterprises that employ fewer than 250 per sons and whose annual turnover or annual balance sheet total does not exceed 50 mil lion euro THRESHOLDS Art 2 Enterprise category Micro lt 50 million in 1996 40 million lt 10 million in 1996 5 million lt 10 million in 1996 7 million lt 2 million previously not defined lt 2 million previously not defined What do these criteria cover The staff headcount is a compulsory criterion for determining whether an enterprise can be con sidered an SME and if so in which category the SME falls If an enterprise does not meet
71. to draw up consolidated accounts pursuant to that Council Directive to know automatically that they are also linked within the meaning of the definition of SMEs In the event of a subsequent amendment to that Directive leading to a divergence between the two definitions the model declaration would however have to be adapted to take account of that In view of the timetable for the entry into force of any such possible amendment that adaptation could probably take place simultaneously with any possible future amendment to the Recommendation on the definition of SMEs pursuant to Article 9 of its annex 45 MODEL DECLARATION INFORMATION ON THE SME QUALIFICATION Precise identification of the applicant enterprise Name or Business name sre ES otne ya araa EREE A E T E ERUR Registration VAT number seene Names and titles of the principal S TT Type of enterprise see explanatory note Tick to indicate which case s applies to the applicant enterprise D Autonomous In this case the data filled in the box below result from the accounts of the enterprise applicant enterprise only Fill in the declaration only without annex D Partner enterprise Fill in and attach the annex and any additional sheets then complete the O Linked enterprise declaration by copying the results of the calculations into the box below Data used to determine the category of enterprise Calculated according to Article 6 of the Annex to the Commis

User guide to the SME defi nition - European Commission

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