In Germany, companies are classified by size under the German Commercial Code, the HGB. This is particularly relevant for French companies looking to establish themselves in Germany, because it determines their accounting and publication obligations.
The four size classes
The HGB distinguishes four size classes:
- Micro companies
- Small companies
- Medium-sized companies
- Large companies
The three criteria
Three criteria determine the classification:
- Balance sheet total
- Turnover over the last 12 months
- Average number of employees
A company falls into a category if, in two consecutive financial years, it does not exceed more than two of the following thresholds:
| Size class | Balance sheet total | Turnover | Employees |
|---|---|---|---|
| Micro company | ≤ 450,000 € | ≤ 900,000 € | ≤ 10 |
| Small company | ≤ 7,500,000 € | ≤ 15,000,000 € | ≤ 50 |
| Medium-sized company | ≤ 25,000,000 € | ≤ 50,000,000 € | ≤ 250 |
| Large company | > 25,000,000 € | > 50,000,000 € | > 250 |
What follows from the classification
Different requirements apply depending on the size of the company:
- Micro companies: simplified balance sheet, reduced publication obligations.
- Small companies: the balance sheet and the notes have to be published, but not the profit and loss account.
- Medium-sized companies: more detailed notes, statutory audit required.
- Large companies: full publication of the balance sheet, the profit and loss account and the management report, statutory audit required.
Capital-market-oriented companies as well as banks and insurers always count as large companies, whatever their actual size.