How big will companies get
The question of the size of a company can be determined on the basis of various criteria. The size of a company can be important when preparing annual financial statements, but also when it comes to funding opportunities or accounting requirements. Usually, the size of the turnover, total assets and number of employees determine the corresponding classification in a large, medium-sized or at least small company. Two of the three criteria decide on the corresponding category. In this context, the term SME (i.e. small and medium-sized enterprises) often appears in connection with company size.
From when does the accounting obligation apply
The demarcation is very clear - from a turnover of 500,000 euros in a calendar year or a profit of 50,000 euros from commercial operations (i.e. no freelancers), you are obliged to keep books - beforehand only financial accounting (the little sister of bookkeeping) is necessary. Anyone who has not yet been required to keep accounts will only be subject to a notification from the tax authorities. Only when they have determined that the relevant size criteria have been met does the accounting requirement apply for the following calendar year. According to the Commercial Code, however, an accounting obligation can arise earlier - this then also applies under tax law.
Large, small and medium-sized company under the Commercial Code
The HGB distinguishes between three criteria for defining the size of the company (number of employees, annual turnover and total assets). Two of these criteria must apply, then the corresponding category applies. For employees, the limits (on an annual average) of 50 and 250 employees apply. Annual sales are limited to EUR 9.68 million and EUR 38.5 million. The balance sheet total is limited to EUR 4.84 million or EUR 19.25 million. Depending on whether you are below, above or between the limits, the category small, medium or large applies.
Company size for the EU
The EU Commission knows another grouping of company size - micro-enterprises. Overall, the borders of the EU are only similar and not the same as the HGB. Why easy if complicated is another option? 😉 The categories small, small, medium and large are also defined here by the number of employees, annual sales and total assets. The limits for employees are 10, 50 and 250 (i.e. identical to the HGB), the limits for annual sales are 2, 10 and 50 million euros (different from the HGB), the limits for total assets are 2, 10 and 43 million euros ( also different). From a tax point of view, however, only the small-large-medium distinction according to the HGB or the tax code is relevant, both of which have an impact on the accounting obligation and consequently on taxation.
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