Business is the independent activity of individuals due to their own risk and risk of liability for their property, which is mainly aimed at obtaining economic benefits in the form of profit. Small and medium enterprises in Russia are slow and difficult to develop, but they gain experience, gain their positions in the economic structure and become an organic part of it. The growth potential of small and medium-sized enterprises in the difficult situation of Russia's overall economic development shows its potential. There is no single definition of a small business. Usually, it is connected with the volume of activity and the number of employees in the company. These are the standards that distinguish small businesses from large companies. These standards differ from country to country, but in most cases, the following divisions are used:
- Large - a company with more than 500 employees;
- average - from 100 to 500 people;
- small - up to 100 people.
In the Russian Federation, this standard is not the same in different areas of the economy. On August 1, 2016, the Resolution of the Government of the Russian Federation No. 265 on the Limits of Income from Entrepreneurship came into force. It sets income limits for small and medium-sized enterprises. Previously, sales revenue was assessed to determine whether a company was suitable for such company standards. At present, the broader concept of "income from entrepreneurial activity" is used.
Not only sales revenue is taken into account but also tax accounting revenue. Understand which organization and individual entrepreneur meet the definition of small business in 2017. To be considered as a small, medium or micro company in 2017, it is necessary to approach three main parameters:
- To fall within the income limit
- To be included in the number of staff
- To be subject to restrictions on the shares of other companies participating in the share capital.
Representatives of small and medium-sized enterprises, regardless of taxation, are companies and entrepreneurs, if they meet the conditions. This can be an enterprise individual entrepreneurs under the simplified taxation system, and the unified tax on imputed income, patent, and the general system of taxation. Investment companies for small businesses and specialized investment companies for them are private companies that provide investment funds and long-term loans to small businesses. Some small business investment companies invest capital in exchange for shares. Others provide loans, while others can offer both. Each small business investment company has its policy. The main investors for small businesses are venture capitalists and business angels. An angel business is a type of private independent investor, and even if the business is currently in the sowing stage, the angel business is ready to invest in certain start-ups (ideas only). Venture capitalists (VCs) are those who provide funding in the stock market to companies with high development potential. Financing venture capital investors for investments in companies is called venture capital. Venture capital companies are often limited liability companies that are supported by many venture capitalists. Article 15 of the Federal Law "On the Development of Small and Medium-Sized Enterprises in the Russian Federation" No. 159 introduced a commitment to create a framework for the support of small and medium enterprises to the government and local authorities, as well as to equity and closed-end mutual funds. However, the investment market for small businesses has not yet been formed. The reason for the inefficiency of government measures was their focus:
- The government encourages businessmen to develop new products for the market, but the demand for these products is minimal.
- The internal economic environment, its raw material orientation, and unjustified monopolization are not conducive to the formation of demand.
- Large enterprises do not create conditions for the development of small business, as it happens in Western Europe, where large corporations form microbusinesses around them.