1. Legal framework
To ensure equal treatment of the different EU-related matters in
which SMEs are involved, the European Commission in 1996 issued
Recommendation
1996/280/EC concerning the definition of micro, small and
medium-sized enterprises. In order to adapt the definition of SMEs to the
economic developments and to avoid difficulties of interpretation that have
emerged in its application, the Commission decided to replace the
Recommendation completely. After two rounds of public consultations in 2001 and
2002, the Commission published the new
Recommendation
2003/361/EC, which entered into force 1st January 2005.
2. Aim of the definition
The definition of SMEs is meant to guarantee that only those
enterprises which really need the advantages from which SMEs benefit, including
the different rules and measures in their favour, at both the national and EU
level, actually benefit from them.
Prior to the adoption of Recommendation 96/280/EC many problems
arose from the fact that there was no uniform term for SMEs at the Community
level, among Member States or at the European Investment Bank (EIB) or European
Investment Fund (EIF).
Without compulsory legal effect for its addressees, a recommendation
must, however, be taken into account when interpreting national laws. Some
results have actually been achieved through the adoption of the first
definition. The significance of a fair definition is strictly related to the
specific treatment the EU grants to SMEs in several areas: national state aid
schemes, Community programs to support Research and Innovation, Regional Funds
and financial intervention in favour of venture capital funds and guarantees
for loans to help counterbalance the different economic difficulties frequently
faced by SMEs. The common goal behind SME promotion is the enhanced
competitiveness of the EEA, as emphasised by the
Lisbon European
Council.
3. SMEs in FP6
The participation of SMEs in the 6th framework programme (FP6) is an
explicit target for the European Commission. The programme allocates at least
15% of its total budget exclusively to SMEs under the seven thematic priorities
(1,700 million €) and provides special instruments exclusively for SMEs'
participation:
CRAFT
and Collective Research (473 million €).
4. Overview of the new definition
The new recommendation focuses strictly on real SMEs and tries to
remove groups of enterprises with considerably greater economic power than a
genuine SME from the category. The main characteristics of the new definition
are the following:
a) "Staff headcount criterion"
The number of people employed was and will continue to be the main
criterion for categorising an enterprise as an SME. The thresholds remain
unchanged at 250 persons for Medium-size enterprises, 50 for Small and 10 for
Micro enterprises, where one person corresponds to one annual work unit (AWU).
The work of part-time employees is coherently counted as fractions of an AWU.
One amendment is that, in order to promote professional training, apprentices
and students engaged in professional training will no longer be counted as
staff. The duration of maternity or parental leave will also cease to be
counted in order to favour enterprises that promote a life-work balance.
Another important aspect of the new definition is its special attention to
micro enterprises and to the inclusion in this category of all types of
enterprises, regardless of their legal status. Family businesses and the craft
sector might particularly benefit from this adaptation of the definition.
Support schemes from regional and national authorities for this enterprise
group will thus be facilitated.
b) The financial criterion
Introducing a financial criterion is a necessary adjunct to the
number of employees, otherwise the real scale and performance of an enterprise
cannot be accurately judged. In addition, the annual turnover must not exceed
50 million € (1996: 40 million €) and/or the annual balance sheet
total must not exceed 43 million € (1996: 27 €). The changes
reflect an increase in both prices and productivity since 1996.
Both headcount and financial ceilings have to comply with the
requirements of the definition whereas, for financial ceilings, it is
sufficient if either the amount of turnover or the balance sheet total stays
within the financial limits. Member States and other EU financial institutions
may fix lower requirements if needed in order to address specific needs of the
SMEs concerned.
c) Typology of enterprises
Another change to be taken into account is the clear typology of
enterprises. To begin with, any entity, regardless of its legal form, which is
engaged in economic or craft activities, including on an individual or family
basis, as well as partnerships or associations, must be considered an
enterprise.
These enterprises are divided in 'autonomous enterprises',
'partner enterprises' and 'linked enterprises'. The distinction is based on the
enterprises' relationship in terms of participation in capital, voting rights
or exercising a dominant influence.
d) Declaration form
In order to reduce administrative burdens for enterprises and to
speed up procedures, the new Recommendation introduced a model for a voluntary
enterprises' status
self-declaration.
[For more detailed information on these issues, please consult the
extended
version of this document]
