Classification of companies according to their size in Spain

  • Companies in Spain are classified as micro, small, medium, and large based on the number of employees and turnover.
  • SMEs are key, representing the majority of businesses with fewer than 250 employees.
  • There are different classifications depending on the economic activity, legal form and scope of operation.
  • Trading companies focus on the purchase and sale of products, without producing goods or extracting raw materials.
El Rincón del Conocimiento

8 minutes

In this interesting article we will show you in detail the classification of companies according to their size in Spain, and their conditions

classification-of-company-according-to-its-size-in-spain-2

Classification of companies according to their size in Spain

In this section, we will explain how companies are classified by size in Spain. Companies and/or production units are classified according to their size as large, medium, small, and micro-enterprises.

SMEs in Spain occupy a large percentage of the companies that are dedicated to this model, and only a very small percentage is dedicated to the business sphere. To do this, it is necessary to know the different types of company by size that are applied in Spain, following the criteria of the European Union.

This classification of companies considers three different criteria:

  • Cash, known as workers or employees.
  • Business volume: This consideration refers to the calculation of the income of an entity during the entire period of the fiscal year, generated from the sale of products or provision of services, object of its commercial reason, which is reflected in the annual Financial Statements, it displays the value of the main assets of a company, possessions, as well as accounts receivable and obligations payable.

classification-of-company-according-to-its-size-in-spain-4

Already taking into account the aforementioned criteria, in Spain and the European Union there is a difference between the following types of company by size:

1.  Microenterprise: if you have less than 10 operative workers.
2. Small company: if you have less than 50 workers who make up your payroll.
3. Medium company: if it has a number between 50 and 250 operative workers.
4. Big company: If you have more than 250 active workers.

SMEs

The term SMEs, in economic terms , translates as "Small and Medium-sized Enterprises". For a company to be classified as an SME, it must be a business, have fewer than 250 employees, and have a turnover and commercial activity that does not exceed 50 million euros, or an annual financial statement that does not exceed 43 million euros.

Currently, the term SME considers three subcategories of company types by size: microenterprise, small company, and medium-sized company.

classification-of-emoresa-according-to-its-size-in-spain-3

Microenterprises

Within the SME business models; the microenterprise is the smallest, it must have less than 10 operative workers, whether they are employees, partners, temporary workers or owners. Not considered, both in this and in the other categories, are those people who have an internship contract or professional training, as well as mothers and fathers who are enjoying parental leave.

In addition, it is necessary that the microenterprise meets one of these two requirements: either register a volume of business activity, less than 2 million euros, or failing that, with the annual financial statement that does not exceed 2 million euros.

Small companies

The next category within the scheme of SMEs is the small business. In this modality, the number of operational and effective personnel in the company must be less than 50 people, they must have an annual turnover of no more than 10 million euros, or a financial statement, which does not exceed the same figure. of 10 million euros.

classify-according-to-its-size-in-spain-5

Big enterprises

After outlining the general classification of companies by size in Spain, we will now discuss large companies. A company is considered a large company based on its size and economic criteria: if its annual business exceeds €50 million and its financial statements exceed €43 million—meaning it surpasses the limits for SMEs in both criteria—it will be considered a large company.

Exceptions in the definition.

According to the regulations, certain considerations are required to determine the size:

  • Publicly owned companies are not considered SMEs.
  • Under no circumstances may SMEs be considered, companies whose capital is controlled by 25% of companies, whose quantitative variables exceed the SME limits.
  • For reasons of administrative logistics, you can choose to stick to a single criterion, that of the effective (employees).

Classification according to their economic activity

  1. From the primary sector, natural resources are obtained (agricultural, livestock, fishing, mining, etc.).
    2. From the secondary sector, it concentrates its productive activity by physically transforming the resources obtained from the primary sector into consumer goods. Industrial and construction companies are found in this group.
    3. From the tertiary sector (services and trade), they include activities of a different nature, such as trade, transport, tourism, consultancy, etc.

Classification of Companies according to their legal form

1. Individual companies: The Spanish Commercial Code defines, as the Individual Merchant Entrepreneur, the one who is empowered to assume all decisions within his powers and, in turn, has unlimited responsibility for the operation of the company, since he responds with all his equity, of the results obtained in the management and direction of the company.
2. Corporate Companies or Companies: Made up of several people driven by a single goal and a particular interest. In this classification, most of the companies belong. There are different types of companies or societies, depending on the legislation of each country, among the most common are:

  • Limited companies (SA): They are organizations in which the capital is divided according to the contribution of each partner.
  • Limited Liability Company (SRL): In this type of company, the partners have a participation quota in the capital of the company, but if the latter incurs in arrears or insolvencies and fails to pay its legal commitments, they will be liable for the share that corresponds to him as a partner or shareholder.
  • Cooperatives: they are associations in which the benefit of a group is sought, they are managed without profit.

Classification of Companies according to their scope of Operation

  1. Local companies
    2. Regional
    3. Nationals
    4. Multinationals

Classification of Company according to its composition of capital

  1. Private company: In this model, the capital in its entirety is in the hands of private individuals.
  2. Another is the Public company: In this type, the Government has the total and absolute capital of the company.
  3. JV: Shared Company Model: this type of company has its capital structured, part of public capital and part of private capital, in the proportions that the parties have decided. This model is generated when public investment is insufficient to implement any   The contribution can be capital, labor or work equipment.
  4. Finally, the Self-management company: In this model the capital is under the responsibility of the workers. If you want to know a little more about this interesting article, I invite you to enter this link  Balance sheet of a company which deals with the latest information.

What is a Company?

The company is the economic-social unit where capital, work and management come together to carry out a useful social and economic production, in accordance with the needs of the common good. The fundamental elements for its constitution are: capital, work and material resources.

In the field of economy, it is responsible for satisfying the needs of the market, through the application of material and human resources. In other words, it is in charge of the organization and activation of the factors of production, capital and work.

The main types or models of commercial companies or legal forms in Spain are different from each other due to some factors, such as their share capital, number of partners, liability, etc. The most active companies and those that lead the business structure are limited, anonymous, labor and cooperatives.

What are commercial companies?

It is that company, where activities of purchase and sale of products, merchandise already prepared for human consumption or raw material for the production of other products and their derivatives are developed.

Characteristics of commercial companies

Among the relevant characteristics of a commercial company we have the following:

  • It is not within its objectives, they manufacture finished goods or extract raw material
  • They are the ones that establish intermediation lines between industrial companies and the final consumer.
  • They are dedicated, among other activities, to the provision of services, maintenance and repair of the products they sell.
  • One of its fundamental objectives is to seek to satisfy consumer demand.

Add as preferred source in Google