Learn all about company size and define yours

Company Size is always relative to the size of the enterprise. We can measure this by considering both cash values ​​and considering physical space or the number of people working in the business. In Brazil, Federal Government agencies use different measurement models to classify the size of companies, and in this article, we will explore this subject.

It is important to differentiate the size of the company from the type of company: while you measure the size of the company by its size (which can be a Micro-enterprise, Small Business, etc.), the type of company indicates the corporate formation and the type of activity of the business – and that’s where Limited Liability Companies (LTDA) and Individual Limited Liability Company (EIRELI) come in. We are together? 

Here you will see: 

  • How to define the company size? 
  • What are the company sizes? 
  • How to check the company size? 
  • How to change company size? 

How to define the company size?

The size of the company is defined by financial data, such as gross revenue, or referring to production capacity, such as the number of employees. For taxation and financing purposes, annual revenue is the most used indicator in Brazil.

It is on the CNPJ card that the size of the company will appear. The definition is given at the time of opening according to the expectation of billing. Then, each year, the IRS checks the postage from the billing statement.

What are the possible company sizes? 

Companies are divided into these main sizes:   

  • Individual Micro entrepreneur (MEI); 
  • Microenterprise (ME); 
  • Small Business (EPP); 
  • Medium-Sized Company; 
  • Big company. 

Discover the size options for Micro and Small Enterprises:

1. MEI (Individual Micro entrepreneur)

The Individual Micro entrepreneur is a company size to encompass activities with revenues of up to R$81 thousand per year – it is also the smallest type of company available in Brazil. It can generate confusion for the entrepreneur to know that the MEI is both a type of company and defines a size – and this is the only case in which this occurs.

2. ME (Microenterprise)

The size of Microenterprises, by revenue classification according to the National Statute of Microenterprises and Small Businesses, Complementary Law 123, of 2006, allows reaching up to R$360 thousand per year and this is one of the main differences between MEI and ME. As we mentioned, the classification of revenue determines the size and taxation within the Simples Nacional ranges, a regime to which companies of this size can adhere.

In addition to advantages in the tax regime of the Federal Revenue, Micro-enterprises have other advantages with various public and private programs. In general, taxation is reduced and credit lines have a lower cost and longer-term.

3. EPP (Small Company)

By the same classification of the Statute, a Small Business can earn up to R$4.8 million per year. Although already with greater revenue and size, the Small Business Company still has several benefits and can also opt for Simples Nacional.

How to check the company size?

Information on the size of the company, in its most useful model for the practical purposes of business life, appears on the CNPJ (National Registry of Legal Entities) card.

Anyway, each agency with which your company has a relationship maintains a separate record (yes, still!), and sometimes your CNPJ indicates a size and the other record ends up containing other information. It is good to check, especially when this data will be valid to indicate the taxation that your company will face.

How to change company size?

For the Federal Revenue, the size of the company is based on the declaration made annually, considering the billing of the headquarters and branches. Therefore, the size changes as this result change each year – there is no need for a specific procedure to change it.

The importance of the size of the company in the Revenue is especially for those that are framed in the Simples Nacional tax regime: the limit is R$4.8 million in revenue, and there are different ranges within this regime – the lower the revenue, the lower the revenue. the rate

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