What is the meaning of Medium-sized enterprises? Concept, Definition of Medium-sized enterprises

Concepts and meanings of medium-sized enterprises

1 Meaning of medium-sized enterprises

The small and medium enterprises (also known by the acronym SME, lexicalizado as SMEs) is a company with distinctive features, and has dimensions with certain occupational and financial limits preset by States or regions. SMEs are agents with specific logics, cultures, interests and an entrepreneurial spirit. Usually the term MSM has also seen (acronym of "micro, small and medium enterprise"), which is an expansion of the original term, which includes micro enterprise.
The small and medium-sized enterprises are independent entities, with a high predominance in the trade market, being virtually excluded from the industrial market by the large investments needed and the limitations imposed by the legislation in terms of the volume of business and staff, which if they are overcome converted, by law, to a small business in a small company, or one medium-sized company is automatically converted into a great company. Why an SME may never exceed certain annual sales or a number of staff.
Small and medium-sized enterprises play an important role in the economy of all countries. The OECD countries tend to have between 70% and 90% of those employed in this group of companies. The main reasons for their existence are:
• Can be products individualized as opposed to large companies that focus more on more standardized products.
• Serve as auxiliary tissue to large companies. Most large companies use smaller subcontractors to perform services or operations that be included in the tissue of the large corporation would result in an increase in cost.
• There are productive activities where it is more appropriate to work with small businesses, such as for example the case of agricultural cooperatives.
The technological progress and the development of the media bring with them advantages and opportunities for the company however also bring threats; a company can grow and prosper with the use of technological advances if it is that they are within your reach, on the other hand you can resize to not have access to new technologies or media to which the competition if you can. In addition the disappearance of borders thanks to the new global era in which live makes it possible that a distant competitor be next through wide media coverage.
SMEs have great advantages such as its capacity of adaptability thanks to its small structure, their ability to specialize in each niche offering a kind of attention directly and finally his communicative ability. The biggest advantage of an SME is its ability to quickly change its productive structure in the case of varying market needs, which is much more difficult in a large company, with a significant number of employees and large sums of invested capital. However the access to very specific markets or a reduced portfolio of clients increases the risk of bankruptcy of these companies, so it is important that these companies expand their market or its customers.

2. Definition of medium-sized enterprises

Updated the definition of micro, small and medium-sized enterprises to take into account the evolution of the economy since 1996 (inflation and productivity growth) and the lessons learned from his practice.
The new definition requires the qualification of small and medium-sized enterprises (SMEs) and the concept of microenterprise. Thus reinforces the effectiveness of community programs and policies aimed at these companies. It is avoid that enterprises whose economic power is greater than of a true SMEs can take advantage of support mechanisms intended specifically for these.
Micro, small & medium enterprises
Micro-enterprises and small and medium-sized enterprises are defined in function of its peacekeepers and its volume of business or its annual balance sheet.
Defines a medium-sized company as an enterprise which employs fewer than 250 persons and whose annual turnover does not exceed EUR 50 million or an annual balance sheet total not exceeding EUR 43 million.
Defines a small company 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.
It is defined to a micro-enterprise 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.
Autonomous companies, associated companies and related companies
The new definition of SME clarifies the typology of enterprises. Thus, distinguishes three types of companies depending on the type of relationship they have with other enterprises in terms of participation in the capital, voting rights or right to exercise a dominant influence:
• autonomous enterprises;
• associated companies;
• the related companies.
Autonomous enterprises are, by far, the most frequent case. It is any company that does not fit within any of the other two types of companies (associated or linked). A company is autonomous if:
• does not have a share equal to or exceeding 25% of another company;
• does not have a 25 per cent or more controlled by a firm or a public body, or jointly by several linked enterprises or public bodies, with a few exceptions;
• has no consolidated accounts and is not included in the accounts of a company having consolidated accounts, and is not, therefore, a related company.
A company can, however, receive the qualification of autonomous, although it reaches or exceeds the limit of 25%, when certain categories of investors, such as those who perform a regular activity of investment in capital are present risk (providenciales investors or business angels).
They are companies associated with those companies that establish important with other companies financial associations, without that one exercising effective direct or indirect control over the other. Companies which are not autonomous but that are not linked together are associated. A company is «associated» to another if:
• holds a stake of between 25 and 50% of the undertaking;
• the other company owns a stake of between 25% and less than 50% of the first;
• the first has no consolidated accounts containing the other and not included by consolidation in the accounts of that or a company linked to one.
Linked enterprises correspond to the economic situation of undertakings which form part of a group, for the direct or indirect control of the majority of the capital or of the voting rights (including through agreements or, in some cases, through individuals shareholders), or for the ability to exercise a dominant influence over an undertaking. It is, therefore, less frequent cases that they are distinguished generally form very clear of the two preceding types. In order to avoid problems of interpretation to the companies, the European Commission defined such companies collecting, when they adapt to the object of the definition. Thus, a company knows, generally on an immediate basis, which is linked when it is obliged, in accordance with this directive, have consolidated accounts or if you figure by consolidation in the accounts of an enterprise required to have such accounts.

Legal value of the definition

The definition of micro, small and medium businesses is binding only for certain matters, such as State aid and the implementation of the structural funds or community programmes, particularly the framework programme for research and technological development.
However, the European Commission strongly recommends Member States, the European Investment Bank and the European Investment Fund to be used as a reference. The measures to be taken in favour of SMEs will thus present a greater coherence and will be more effective.

3 Concept of medium-sized enterprises

He is understood by undertaking the Organization of human and economic resources which aims to achieve a goal, especially economic, whether it engages in trade, industry, finance, or to provide services in a systematic way.
There are different ways of classifying companies, one is by its size, or according to the human, financial and technical resources available, and its volume of business. According to this criterion are distinguished very small or micro enterprises, small, medium-sized and large enterprises or macro enterprises.
Placing a company within each classification may vary according to the geographical location that is considered. In the European Union that a company is medium if work there between fifty and two hundred and fifty people, with an annual balance sheet that does not exceed 43.000.000 euros and more than 10,000,000 said.
Argentina, they encompass next to small businesses as "SMEs" (small and medium-sized enterprises), and vary their conditions according to the category of concerned, for example, in the industrial sector a company is medium if you have up to three hundred employees and its annual sales do not exceed 18,000,000 pesos and your heritage does not exceed 10,000,000 pesos. Instead a company dedicated to trade, will be medium if it has up to one hundred employees, their sales do not exceed 12,000,000 pesos annually, and their net worth not exceeding the 2,500,000. Excludes those that belong to economic groups despite its dimensions.
SMEs enjoy legislative protection and the State in general, so that they achieve access to credits, to strengthen their competitiveness, since they play a great role social, as creators of employment. Medium-sized companies in Argentina have a Confederation (CAME).