Company Size as an Issue: The ECHA Offers Guidance

At the end of June, the ECHA will provide a new IT tool on its Web site. The tool helps companies find the correct classification of the size of their enterprise and to provide guidance. The size of the enterprise must be entered correctly during registration. The entry ultimately determines the amount of the registration fee. Small companies pay less than large companies. This approach is defined by Commission Regulation (EC) No 340/2008. Reviews performed by the ECHA show that more and more companies make false statements about the size of the company, which can lead to additional handling fees. The need for action is clear, as indicated by the numerous cases before the General Court of the European Union and the ECHA Board of Appeals.

But what key figures decide if an enterprise is large, midsize, or small? Various definitions apply in different countries. That’s why the definition of the EU regarding small and medium sized companies provide the actual foundation. According to the classifications, any company with more than 250 employees is considered a large enterprise.

Representatives of small and midsize companies, like Marko Sušnik of the employers’ organisation representing the interests of European crafts, trades and SMEs at EU level (UEAPME) point out the weaknesses of such a strict definition. A company with 249 employees, he says, hardly differs from a one with 251 employees. And, he indicates, the profile of many companies with a large number of employees clearly classifies them as small and midsize companies. A lack of clarity is evident for companies with a complex structure, so that the clear guidelines of the ECHA should simplify correct classification.

It is a fact that many companies underestimate the importance of correct and complete statements regarding company size. False statements can be expensive for a company. In total, the costs of a false statement can be higher than the cost of registering as a large company. Making correct statements from the very beginning is absolutely worth the effort. If you want to make changes later on – if the company has grown in the meantime, for example – you can do so. The ECHA offers tips and advice on its Web site.

If you still have questions, we are happy to advise and support you. Please contact us at reach@kft.de.