Private business entities can be classified into small, medium and large businesses according to certain criteria. These criteria are determined by law.
How to identify the status of a business entity?
An entrepreneur should, in the process of registering a business, choose the status of the company being formed. But at the same time, he must adhere to the requirements and conditions prescribed by law. Otherwise, the status will simply be lost.
The status of a business entity is usually seriously affected by such parameters as: the average annual number of employees, types of activities and the value of assets over a certain period of time. If we talk about the payroll number of employees for the year, then it is revealed by summing up the number of employees for the past months and the reporting year. Accordingly, the amount received will need to be divided by twelve.
To correctly identify the average annual value of assets, accounting needs to sum up the value of assets on the first day of each month and divide this number by thirteen. The result will be the required amount.
Varieties of small businesses
A private business entity can belong to one of three existing categories of entities. So, small business entities include: individual entrepreneurs with an average annual number of employees, which does not exceed fifty people; legal entities with an average annual asset value of no more than 60,000 MCI and the same number of employees.
In addition, various commercial organizations are considered to be small business entities, in the authorized capital of which the share of participation of charitable foundations, as well as public organizations, does not exceed twenty-five percent. Individuals who are engaged in entrepreneurial activities without forming a legal entity can likewise be classified as small businesses. Some organizations and individual entrepreneurs with a maximum number of employees of up to fifteen people may belong to small businesses. In such a situation, they are subject to a simplified accounting and taxation system.
A small enterprise should be considered only if the amount of proceeds from the sale of goods or some kind of work for several quarters did not exceed the amount equal to 1000 times the minimum wage. Almost always, the active development of small businesses can be supported by credit institutions.
