SME Declaration

SME Definition

Micro, small and medium-sized enterprises (SMEs) refer to businesses whose personnel numbers and turnover fall below certain limits. The European Commission defines these limitations as:

  •  enterprises which employ fewer than 250 persons, and,
  •  have an annual turnover not exceeding 50 million euro, and/or
  •  an annual balance sheet total not exceeding 43 million euro.

Voluntary Community and Social Enterprise (VCSE) organisations are also defined as an SME for the purpose of the Catalysing Innovation in North East Clusters project.

North East England Definition

Projects delivered by the Innovation SuperNetwork work with eligible SMEs in the North East LEP area. The North East LEP covers the local authority areas of County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland.

Undertaking in Difficulty Definition

Undertakings in difficulty as defined under the State Aid rules should not be supported, in accordance with Article 3.3(d) of the ERDF Regulation (EU) No 1301/2013.

The definition under State Aid rules that should be used when assessing whether an undertaking constitutes and undertaking in difficulty is set out in the General Block Exemption Regulation (GBER), No 651/2014 .   Article 2 para 18: 

“‘undertaking in difficulty’ means an undertaking in respect of which at least one of the following circumstances occurs:

(a) In the case of a limited liability company (other than an SME that has been in existence for less than three years or, for the purposes of eligibility for risk finance aid, an SME within 7 years from its first commercial sale that qualifies for risk finance investments following due diligence by the selected financial intermediary), where more than half of its subscribed share capital has disappeared as a result of accumulated losses. This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the own funds of the company) leads to a negative cumulative amount that exceeds half of the subscribed share capital. For the purposes of this provision, ‘limited liability company’ refers in particular to the types of company mentioned in Annex I of Directive 2013/34/EU (1) and ‘share capital’ includes, where relevant, any share premium.

(b) In the case of a company where at least some members have unlimited liability for the debt of the company (other than an SME that has been in existence for less than three years or, for the purposes of eligibility for risk finance aid, an SME within 7 years from its first commercial sale that qualifies for risk finance investments following due diligence by the selected financial intermediary), where more than half of its capital as shown in the company accounts has disappeared as a result of accumulated losses. For the purposes of this provision, ‘a company where at least some members have unlimited liability for the debt of the company ‘refers in particular to the types of company mentioned in Annex II of Directive 2013/34/EU.

(c) Where the undertaking is subject to collective insolvency proceedings or fulfils the criteria under its domestic law for being placed in collective insolvency proceedings at the request of its creditors.

(d) Where the undertaking has received rescue aid and has not yet reimbursed the loan or terminated the guarantee, or has received restructuring aid and is still subject to a restructuring plan.

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