The amount of subsidy granted is generally influenced by the size of the undertaking. The public aid rules allow small and medium-sized enterprises to be supported more than large ones. However, what happens if a company changes from small to large or vice versa during the implementation of the project or, for example, during the sustainability phase? What is the impact on the subsidy? Do you have to pay it back, or will the co-financing rate decrease or increase? And does this change have to be notified to the grant provider? The answers to these questions will now be presented in this article, and we will also look at potential criminal liability.
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An enterprise is any entity engaged in economic activity, regardless of its legal form, including self-employed persons. An economic activity is generally considered to be any activity consisting of offering products and/or services on a given market.
The basic criteria for determining the size of an enterprise are the number of employees of the enterprise in question and the financial value of the enterprise, which is the annual turnover or the balance sheet total of the annual balance sheet, i.e. the amount of assets. Enterprises are then classified into the following four categories according to these criteria:
A micro-enterprise is an enterprise which employs fewer than 10 persons and has an annual turnover or annual balance sheet total of less than EUR 2 million.
A small enterprise is an enterprise which employs fewer than 50 persons and has an annual turnover or annual balance sheet total of less than EUR 10 million.
A medium-sized enterprise is an enterprise which employs fewer than 250 persons and whose annual turnover does not exceed EUR 50 million or whose annual balance sheet total does not exceed EUR 43 million.
A large enterprise is then an enterprise which is neither a micro, small or medium-sized enterprise according to the above parameters - it is therefore a large enterprise. Thus, a large enterprise employs at least 250 persons or has an annual balance sheet total exceeding EUR 43 million or an annual turnover exceeding EUR 50 million.
Several aspects can affect a change in size. If the number of employees exceeds the threshold set above, the size of the enterprise automatically changes, regardless of whether the financial thresholds are met.
On the other hand, if only one of the financial values (i.e. assets or turnover) is exceeded and the number of employees is not exceeded, the status of the enterprise remains unchanged and the size of the enterprise does not change.
In the case where the number of employees is maintained but both the turnover and asset values are exceeded, the size of the enterprise must again be reassessed.
Following these considerations, a distinction should then be made between so-called endogenous growth (e.g. recruitment/increase in turnover or assets) and so-called exogenous growth (e.g. mergers, acquisitions). These changes may then have an impact on the aid rate/amount of the subsidy, depending on the stage at which the change occurs, whether before or after the grant decision.
Changes in the size of the undertaking detected prior to the grant decision, due to both endogenous (natural) and exogenous growth, have an impact on the aid intensity/grant amount and, where appropriate, on the approval or rejection of the project. Changes in the size of the undertaking after the grant decision due to endogenous (natural) growth do not affect the grant. The beneficiary of the grant is then not obliged to inform about these changes or to submit a possible request for project modification.
Changes in the size of the enterprise after the grant decision caused by exogenous growth are the responsibility of the grant recipient to inform the grant provider and to proceed in accordance with the relevant grant conditions.
With regard to criminal liability, it should be mentioned here that the intentional concealment or suppression of data and documents indicating a change in the size of the undertaking having a direct impact on the grant or its amount may be considered as a criminal offence of grant fraud under Section 212 of the Criminal Code or as a criminal offence of damage to the financial interests of the European Union under Section 260 of the Criminal Code.
We can therefore only recommend that, in the event of a change in the values used to determine the size of a company, recipients or applicants for subsidies should pay due attention to this fact and not ignore it.
Kateřina Chaloupková collaborated on the article.
