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UNCITRAL, Working Group I: Micro, Small and Medium Enterprises


UNCITRAL announced a new meeting for the Working Group I, it will start in 2014 (10-14 February, New York) and will cover micro, small and medium sized companies.

The content of the agenda has not been announced yet, but there would be issues on the flexibility and performance of the obligations required to these companies, their definitions, growth incentives, ways of organization, etc. Furthermore, although this work is pointing to three kind of companies, it should be noted that the obligations of a microenterprise can be quite different from a medium one. This is because in a medium company there are several workers involved and its turnover is usually much more relevant than in a microenterprise.

In this field, the European Union adopted a Recommendation concerning the definition of micro, small and medium-sized enterprises. In this Recommendation we can see the big difference between a medium-sized company and a microenterprise. For example, the first one can be up to 250 workers, while the latter can only reach 10 workers.

(Medium) This Recommendation, adopted on May 2003, first gives a concept for the medium-sized companies: “The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding €50 million, and/or an annual balance sheet total not exceeding €43 million”.

Afterwards, the Recommendation define small and microenterprises.

(Small) By small company is meant: “Within the SME category, a small enterprise is defined as an enterprise which employs fewer than 50 persons and whose annual turnover and/or annual balance sheet total does not exceed €10 million”.

(Micro) Finally, microenterprise is defined as: “Within the SME category, a microenterprise is defined as an enterprise which employs fewer than 10 persons and whose annual turnover and/or annual balance sheet total does not exceed €2 million”.

One interesting question that could address the Working Group, is the diversity of existing legal forms used in SMEs. Then, while the volume of business grows the company is forced, in practice, to use certain legal structures to limit the liability of the partners. However, until companies do not acquire certain volume its structure varies widely, making it difficult to give a general treatment to all the “small”-sized enterprises.