We identify SMEs as small and medium-sized enterprises, but beyond the linguistic aspect, we must consider the legislative concept of an SME from the moment they have a series of rights that are different from those of other companies or can access aid, subsidies or specific financing. In view of this, what is an SME?
Is a self-employed person or a professional an SME or does it have to be an S.L. to fall within this definition? To be an SME, is it necessary to have a business structure and employees or can a business operated by one person be classified as an SME?
The European Commission states that an enterprise is an entity engaged in an economic activity, regardless of its legal form. Therefore, the fact of being an autonomous, professional or commercial company is not going to be a determining factor when entering the SME classification.
The three fundamental criteria that determine the type of company, and consequently whether it is an SME or not, are the workforce that it forms, its turnover and its balance sheet. The qualification of SME will be obtained in the case that the company does not exceed the thresholds that are determined in these three concepts, always bearing in mind that it is not obligatory to comply with the last two criteria and that companies can choose to comply with either the turnover or the balance sheet limit and to exceed one of the two conditions without losing this condition.
SMEs are divided into three classes: micro, small and medium-sized enterprises:
It is established that a microenterprise is one that has up to 10 workers and that its annual turnover or balance sheet total does not exceed 2 million euros.
A small enterprise is defined as an enterprise with fewer than 50 employees and a turnover or balance sheet total of less than or equal to 10 million euros.
A medium-sized enterprise shall have fewer than 250 employees and either a turnover not exceeding EUR 50 million or a balance sheet total not exceeding EUR 43 million.
Calculation of the workforce
Full-time, part-time and seasonal workers should be included in the calculation of the workforce. It includes employees; persons working for the enterprise who are subordinate to it and are treated as employees under national law; owners who run their enterprise and partners who are regularly employed by the enterprise and who enjoy financial benefits from the enterprise.
Apprentices or trainees with an apprenticeship or vocational training contract are not counted as employees. Maternity and parental leave are not counted either.
The staff count is expressed in annual work units. Any person who works full-time in their company or on behalf of their company, during the entire reference year, counts as a unit. As regards part-time, seasonal and those who did not work the whole year, they count as fractions of a unit.
Calculation of turnover and balance sheet
To determine the annual turnover, the income received by your company during the year in question from sales or services, after deduction of discounts, is calculated, excluding VAT and indirect taxes.
The annual balance sheet refers to the value of your company’s main assets, including tangible and intangible fixed assets, financial investments, etc.