Micro Enterprises: Did you know that nothing less than 99.1% of Brazilian companies are micro and small companies? There are more than 6 million legalized enterprises that move in this country. In addition, specifically micro enterprises (ME) employ, according to Sebrae, 52.2% of workers who have a formal contract in Brazil. And there’s more: micro and small companies are responsible for 27% of the National Gross Domestic Product (GDP). So it’s a huge social responsibility.
Table of Contents
What Is A Micro Enterprise (ME)?
Micro Enterprise (ME) is company size, that is, a classification of its size, as is, also, the individual microentrepreneur (MEI), the small company (EPP), the medium-sized company, and, finally, the large-sized company.
According to the National Statute of Micro and Small Businesses, Complementary Law 123 of 2006, a micro company defines a revenue ceiling of up to R$ 360 thousand per year. Furthermore, to be classified as an ME, a company cannot have another legal entity in the capital either; that is, a company cannot own a micro-enterprise.
A Micro-Enterprise Has Some Advantages:
exemption from the need to notify the Ministry of Labor and Employment of collective vacations;
it also dispenses with the need to post a worksheet (no need to note entry and exit times)
Advantages in bids: even if you are not up to date with your tax obligations, you can participate in offers. However, you have to regularize your situation within two days if you are victorious in the process. What’s more: if a micro-company submits a proposal up to 10% more expensive than a large company, the law determines a technical tie between the bids, which becomes a competitive advantage.
facility for taking out memorable lines of credit;
Speed In Decision Making;
- facilitated representation in the Labor Court, including by third parties, even if they do not have an employment or corporate relationship with the company;
- right to inspection of a primarily guiding nature, that is, an ME is entitled to a double inspection
- visit, gaining time to correct errors before the penalty.
The Invoicing Of Micro Enterprise (ME)
- According to the National Statute of Micro enterprises and Small Businesses, you already know that micro-enterprises can bill annually up to the limit of R$ 360 thousand. But there are other ways to classify it:
- The National Health Surveillance Agency (ANVISA) uses Complementary Law 123 of 2006 to define this billing limit.
- The Brazilian Institute of Geography and Statistics (IBGE) already classifies ME as a micro company that has up to 19 employees (in the case of industry) or up to 9 employees (in the case of a trade or services company).
- The National Bank for Social Development (BNDES) also has its classification and defines the micro-enterprise as an enterprise earning up to R$ 360 thousand annually.
- There is also the classification of company size according to the National Environmental Policy, but it only provides for medium-sized and large companies. The first should earn up to R$ 12 million annually, and the second more.
Taxation And Taxes Paid By A Micro Enterprise (ME)
A micro-enterprise can join the Simples Nacional, a simplified tax system, with the issuance of a single guide with all taxes included. A significant detail is that micro companies can also subject their monthly gross revenue to taxation on a cash basis, that is, at the time of actual receipt, in place of the accrual basis. It allows for better cash flow, which is a tremendous advantage.
The micro-enterprise may also adhere to the presumed profit tax regime. In this case, the Income Tax and Social Contribution on Net Income rates are calculated based on a business projection. PIS/PASEP, Cofins, IPI, ICMS, or ISS must also pay, all charged separately
An ME can opt for the taxable income tax regime, which is mandatory for companies that earn more than BRL 78 million annually. But a lot depends on the expenses involved in the business.
Types Of Companies That May Qualify As A Micro-Enterprise
- Individual Limited Liability Company (EIRELI);
- Company Ltd:
- Limited liability company;
- Sole Proprietorship Limited Company;
- Sole Entrepreneur.
- Differences between MEI, ME and EPP
An individual micro enterprise (MEI) can only earn up to BRL 81,000 annually. In addition, the MEI company has the right to contact only one employee, still earning the minimum wage for the category.
On the other hand, a small business (EPP) will characterize an annual turnover of R$ 360,000.01 to R$ 4.8 million. If it is a trade or service company, it may have between ten and 49 employees. If you are a construction company or an industry, you can have between 20 and 99 registered employees.
Hire an accountant specializing in microentrepreneurs
Accounting can (and should) make all the difference in your business. It is through their numbers and analyses, for example, that making much more proactive managerial decisions is possible. But, more than that, specialized and purposeful accounting works towards management and results.
It is precisely what Gerardo Empreendedores proposes to do. We are specialists in accounting for micro-enterprises (ME), and we offer personalized service for micro-entrepreneurs, who are the ones who most need support to undertake. And you already know.
Talk to one of our experts now. Micro-entrepreneurs and micro-entrepreneurs are very welcome, and it is mainly to them that we dedicate all our efforts. So let us know your plans, needs, bottlenecks, and difficulties, and let’s walk towards business success together. We strongly believe in this, and we are at your disposal.
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