EU creates a new category of companies: small with average capital and fewer liabilities

The European Commission has proposed on Wednesday the creation of a new category of companies in the EU, which will be able to benefit from reliefs for small businesses, although there is a larger one than the current capital.

The category, called « Small Medium Capitalization Companies, » will be released from eight laws regulating the work of business in the EU.

The initiative is the new priority of the European Commission to reduce the administrative obligations of companies, and it is believed that it will make them more competitive in the world market.

Small average companies

Companies with up to 750 employees and a turnover of EUR 150 million or total assets up to EUR 129 million are offered to be considered « small companies with average capitalization ».

Currently, small companies are considered those who have up to 250 staff. Above this number, they become large businesses and their duties change.

European standards provide more stringent requirements for larger companies and a number of reliefs for small and medium-sized businesses, especially with regard to administrative rules for business running.

According to the European Commission, the new category of small medium -sized companies will affect 38,000 EU enterprises. Currently, most of them are regional players, but released from bureaucracy, they could develop and become larger European companies, hoping in Brussels.

Relief

The European Commission proposes that the new category of companies be released from compliance with the requirements of eight directives and regulations:

Companies with less than 250 employees have already been released from the obligations to report on these legal acts, which will save them EUR 400 million administrative costs.

The obligations intended to be dropped are mainly related to the publication of information, registration of commercial activities, keeping documentation, declaring compliance on paper, paper instructions for use, etc.

It is also offered to postpone two years on the deadline for the introduction of rules for proper verification for conformity of rechargeable batteries – from 2025 to 2027.

More laws of cancellation

This is the fourth proposal to relieve the bureaucratic burden on business, having already been postponed the application of two green transaction directives, which relate to greater transparency on the supply chains and responsibility of companies for their environmental effects.

The European Commission announced on Wednesday that it was planning to offer reliefs for the arms industry in June and for the chemical sector afterwards.

In the meantime, Germany said it was negotiating with the Commission to simplify the Supply Chain Act. He places requirements for big business to check whether their suppliers use forced labor or cause environmental damage.

French President Emmanuel Macron said this week that the law should be « downloaded », 10 days.