Criteria for small and medium businesses. Which business is considered small and which is medium

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The state creates special conditions for the work of small and medium enterprises. They get fewer inspections, pay reduced taxes, and can keep more simplified accounting records. However, not every firm can be considered small, even if it occupies a small area. There are special criteria for small and medium-sized businesses, according to which they are determined by the tax office.

The main criteria by which small and medium-sized enterprises are determined

There are three criteria for defining medium-sized businesses and small businesses. The first is the volume of the share in the authorized capital of third-party organizations, foreign investors or the state. The second criterion is the number of employees. The third is the annual profit before tax.

What is a small business

Small business is an enterprise organized in the form of an individual entrepreneur, partnership, cooperative, LLC, which has an annual profit before tax of not more than 800 millionrubles and the number of employees up to 100 people.

One of the main advantages of a small business is that you do not need to have large amounts of initial capital or a large potential customer base to start a small business. Thanks to this, he can work where large enterprises would fail. For example, in the production of unique goods, works and services.

What is a micro-enterprise and what are the criteria for defining it

Micro-enterprises are firms with less than 15 employees and their annual income (profit before tax) of less than 120 million rubles. They are subject to the same laws and regulations as small or medium enterprises.

Main differences between medium-sized businesses

Another type of business that is eligible for preferential terms is the medium business. How many people should work in such an enterprise? Not less than 100, but not more than 250. The total amount of profit before tax is 2 billion rubles per year. Medium-sized businesses can operate in the same forms (LLC, sole proprietorship, etc.) as small businesses, but they can also be opened in the form of an open or closed joint-stock company, provided that their securities are not listed on the stock exchange. exchange.

General Terms and Conditions for SMEs

There are SME criteria that apply to both forms. itconcerns not only the possibility of keeping accounting according to a simplified scheme, but also the volume of documents required when registering a company. Also, for such enterprises there are restrictions regarding the share of other organizations in the authorized capital of the company.

Belonging to one or another category of business should be stated in the accounting policy and the Charter of the enterprise. It is very important to make this entry, because in its absence, the company may not be recognized as an object of small or medium-sized business. Then the businessman will lose the benefits that are provided by law for this category of enterprises. Although, according to the latest amendments to the law on small and medium-sized businesses, the tax authorities should automatically rank a company in one category or another based on tax return data, mistakes are possible in practice. Then the businessman will not receive the benefits due to him. Therefore, in order to prevent such errors, it is better to indicate this information immediately.

With the growth of profit and exceeding its standard size for three years in a row, the company moves from the category of medium to the category of large business. In this case, the businessman must make appropriate changes to the Charter and accounting policies.

Limitation of the share in the authorized capital of third-party organizations for small and medium-sized businesses

Small and medium-sized enterprises can attract funds from third parties in their authorized capital. However, there are limitations for them. Thus, the share of fundsreceived from foreign investors, the state, charitable foundations, should not be more than 25% of the total amount of the authorized capital from each. The same restrictions on the participation of other legal entities in the formation of the Criminal Code of religious and public non-profit organizations.

The maximum allowable shareholding percentage for firms that are not SMEs is 49%. These conditions are obligatory for everyone, with the exception of enterprises that are engaged in the introduction of new technologies, computer programs of their own production, as well as for those that are engaged in medical and educational services, the creation of scientific institutions, academies of sciences, budgetary organizations, etc.

Legislative regulation

Regulation and support of small and medium-sized businesses in Russia began with Presidential Decrees on the development of a special bill that would clearly spell out the criteria for small and medium-sized businesses, by which they could be identified and separated from large businesses. So, in 2007, the Federal Law “On the development of small and medium-sized businesses in the Russian Federation” was born. Subsequently, the law was revised several times to take into account economic changes in the country.

Another legislative act regulating the activities of small and medium-sized enterprises is the Decree of the Government of the Russian Federation "On the marginal values of income received from entrepreneurial activities for each category of small and medium-sized businesses." In this decisionone of the three main criteria for defining small, medium and micro enterprises is indicated. For micro-enterprises, the maximum income threshold is 120 million rubles of income per year. If it earns more, then it is considered small.

Earlier, before the adoption of this law, firms engaged in this type of activity did not have any special conditions and had to keep tax and accounting records on an equal basis with large enterprises. For their registration, they also had to collect an impressive package of documents. Today, thanks to the adopted law and regulation, it has become easier to open a business. Administrative costs have decreased, it has become possible to register as an entrepreneur online on the public services website.

Legal registration of small and medium enterprises

A small or medium-sized enterprise acquires its status only after registration and adding it to a special register. However, it can change its status if it ceases to meet the criteria for small and medium-sized businesses, which are prescribed by law. For example, with an increase in the number of personnel, an excess of income or the share of participation of another organization in the authorized capital. In order for a status change to occur, at least one criterion is not met. The transition happens automatically. However, a businessman should still clarify this issue with the tax service. You may have to change the Charter of the enterprise and change the accounting policy.

Small and medium business as an engine of the economy

Featuresmall and medium-sized businesses in that their work does not require large material and managerial resources. At the same time, small and medium enterprises solve two main tasks of any modern state: they create jobs and increase the total volume of goods, works and services produced in the country. For example, in the US, small and medium-sized businesses create two-thirds of all jobs. Even giants like Apple, Microsoft and Amazon started as small businesses.

In Russia, despite the strong state support for small and medium-sized businesses, these forms are still in their infancy. According to leading economists of the country, the main reasons for the weak development of small and medium-sized businesses in the country are high interest rates on loans, too frequent changes in tax legislation and the negative attitude of the majority of the population towards business as an occupation.

State support for small and medium businesses

The main differences between small and medium-sized businesses are not only low administrative barriers, but also a number of tax breaks, subsidies issued both for starting and developing a business. Since the beginning of the law on small and medium-sized businesses, the state has provided the following benefits to such enterprises:

• Small and medium-sized enterprises that introduce energy efficient equipment are exempt from paying property tax.
• Firms operating in the field of education and he althcare are exempt from income taxduring the first 9 years of operation.
• Privileges for the privatization of leased real estate from the state.
• There are special social programs to receive subsidies for the opening and development of small businesses.
• With the exception of certain activities (medical care, pharmaceuticals, education), small and medium-sized enterprises are exempt from unscheduled inspections - provided that no violations were detected during scheduled inspections in the past.

Medium and small business is a good opportunity to start your own business without breaking the law. Starting entrepreneurs can take advantage not only of the simplified taxation regime, but also receive financial assistance from the state. Periodically, the state allocates funds to support small and medium-sized businesses, which includes not only tax holidays, but also subsidies.