EU SME Definition: User Guide and Model Declaration

The new SME Definition: User Guide and Model Declaration

Increasingly, European Union and United Kingdom legislation makes reference to the status of an organisation.

In some cases, it is in relation to Public and Private organisations, such as the Environmental Information Regulations 2004, where Public organisations have a duty to respond to requests for environmental information.

In relation to Private organisations, new and developing energy management legislation, such as the Energy Savings Opportunity Scheme (ESOS), looks at the classification of the organisation with reference to headcount and one of two financial metrics.

You may recall that the common “Private” organisations in the United Kingdom are: “Public Limited Companies (PLCs), “Limited” companies (Ltd) and Partnerships including “Limited Liability Partnerships” (LLP).

Under Commission Recommendation (2003/361/EC) concerning the definition of micro, small, medium-sized enterprises (OJ I. 124/36, 6 May 2003), Private organisations may be divided into “micro”, “small”, “Medium sized” and “large”.

Often the above terms are rounded up into one termed: “SME”, which stands for small and medium-sized enterprises.

The principal factors determining whether a company is an SME are:

1. number of employees
2. either turnover or balance sheet total.

Hence, an SME would be defined as an organisation where the headcount of less than 250) and where one of the financial metrics are met. Consequentially, a “large” organsiation is one where the headcount is greater than 250 and where one of the financial metrics are exceeded.

If you wish to further understand the above definitions, please obtain a copy of the Commission Recommendation (2003/361/EC) from http://bit.ly/NSYGxh & an informative booklet on the guide entitled “The SME definition: User Guide and model declaration”, which can be obtained from http://bit.ly/1fQB9Zu