Changes in the classifying terms of small business

The Government of the Russian Federation has changed the terms of reference of legal entities and individuals to small business enterprises by the order from July 13, 2015 of No. 702 "About limiting values of proceeds from sales of the goods (works, services) for each category of subjects of the small and medium business".

Using such occasion, it is appropriate to remind about these conditions in general, using Article 4 of the Federal Law from July 24, 2007 No. 209-FZ «On Developing Small and Medium scale entrepreneurship in the Russian Federation». The conditions are applied to consumer cooperatives, commercial enterprises (except the state and municipal unitary) and individual entrepreneurs and farms.

In brief, these conditions are formulated as restrictions on participation in the capital: the government in share not exceeding 25%; local and foreign companies not relating to the small enterprises, totally no more than 49% (with a few exceptions for the SKOLKOVO project residents and organizations, which are financing the innovations). The limitation of average employment (including part-time, contract agreements and in separate structures): 101 – 250 persons for medium-sized enterprises, till 100 persons for small enterprises, till 15 persons for microenterprises. The limitation of the amount of fees from the sale of goods, works or services (excluding VAT) or all assets value for each of the listed categories by the regulations of the Government of the Russian Federation.

Since 25.07.2015 the maximum values of standards has doubled in comparison with previous ones: 120 mln. RUB for microenterprises, 800 mln. RUB for small business enterprises and 2 bln. RUB for medium business.

Registration or accounting of the small business is not regulated by standards and such status doesn’t require the documentary confirmation. It is enough to meet the above requirements.

The most important positive thing of the small business is the possibility of accounting under the simplified system, which allows significantly save on VAT, tax on profit, property and the uniform social tax. Moreover, executive authorities and local self-government subsidize small and medium-sized enterprises with financial subsidies and the various intangible services and benefits. It is reflected in the corresponding registers of the subjects - support recipients.

The small business has important political and social functions and its meaning is especially growing in difficult economic periods. Small enterprises promote the extension of the range and quantity of produced goods and services without involving of notable public investment; produce the large amount of components and assemblies for large enterprises and carry out many mediatorial functions for them; involve in the turnover of the material resources and financial savings of the population; make a significant contribution in innovative production; promote the formation of the competitive environment and help to overcome the monopoly in general.
This Government Regulation significantly expands the range of small businesses and focused on the establishment and strengthening of business, increase in employment and, possibly, will help to increase the budget fullness; the share of this business category in budget revenues does not exceed 20% (estimated).

For estimation of the possible increasing in number of small business subjects it is possible to cite the statistics of the Federal Tax Service of the Russian Federation: more than 220 th. of limited liability companies, 339 th. of newly formed individual entrepreneurs and more than 16 th. of farms were established in Russia within 6 months of 2015.

Using the «Key financial and economic indicators» section of the company’s report and the recommended list «Grant recipients RF» in the Information and Analytical system Globas- i®, you will know, whether your contractor belongs to the category of small business and whether he is the recipient of the state support.