Before a consideration of notions and different approaches concerning legal nature of small and medium-sized enterprises there are some similar notions, some of which is not the same in the meaning and essence. They are an enterprise, business, company, entity, firm, corporation, sole proprietorship, cooperative, organization, entrepreneur and venture. We are not going to research this question deeply but would like to consider their notions in accordance with law dictionary and legal sources to clarify the further understanding of the phenomena of small and medium enterprises.

Enterprise is “an organization or venture”, especially “for business purposes” or “one or more persons or organizations that have related activities, unified operation or common control, and a common business purpose …” [87, p. 611]. There is also a definition of a governmental enterprise which is “an enterprise undertaken by a governmental body, such as a parks department that creates a public park” [87, p. 611]. In Commission Recommendation of 6 May 2003 «concerning the definition of micro, small and medium-sized enterprises «an enterprise is considered to be any entity engaged in an economic activity, irrespective of its legal form …» including «…self-employed persons and family businesses engaged in craft or other activities, and partnerships or associations regularly engaged in an economic activity» [26].

Business is “1. A commercial enterprise carried on for profit; a particular occupation or employment habitually engaged in for livelihood or gain. 2. Commercial enterprises …” [87, p. 226]. Also business enterprises is defined as “the field of law dealing with various forms of business, such as corporations, limited-liability companies, and partnerships” [87, p. 226].

Company is “1. A corporation – or, less commonly, an association, partnership, or union – that carries on a commercial or industrial enterprise. 2. A corporation, partnership, association, joint-stock company, trust, fund, or organized group of persons, whether incorporated or not, and (in an official capacity) any receiver, trustee in bankruptcy, or similar official, or liquidating agent, for any of the foregoing …” [87, p. 319].

Entity – “an organization (such as a business or a governmental unit) that has a legal identity apart from its members or owners.” [87, p. 612]. Corporate entity is “a


corporation’s status as an organization existing independently of its shareholders. As a separate entity, a corporation can, in its own name, sue and be sued, lend and borrow money, and buy, sell, lease, and mortgage property”[87, p. 612]. Public entity is “a governmental entity, such as a state government or one of its political subdivision.”[87, p. 612]

Firm is “1. The title under which one or more persons conduct business jointly. 2. The association by which persons are united for business purposes … Traditionally, this term has referred to a partnership, as opposed to a company. But today it frequently refers to a company …” [87, P. 710].

Corporation is “an entity (usually a business) having authority under law to act as a single person distinct from the shareholders who own it and having rights to issue stock and exist indefinitely; a group or succession of persons established in accordance with legal rules into a legal or juristic person that has a legal personality distinct from the natural persons who made it up, exists indefinitely apart from them, and has the legal powers that its constitution gives it” [87, p. 391].

Sole proprietorship (also sole trader [90, p. 544]) is “a business in which one person owns all the assets, owes all liabilities, and operates in his or her personal capacity.” [87, p. 1520].

Organization is “a body of persons (such as a union or corporation) formed for a common purpose” [87, p. 1210].

Entrepreneur – “one who initiates and assumes the financial risks of a new enterprise and who usually undertakes its management.” [87, p. 613].

Venture is “an undertaking that involves risk; especially, a speculative commercial enterprise” [87, p. 1695].

Some of these notions are almost similarly presented in other dictionaries [90, p. 73, 111-112, 140, 251, 544; 85, p. 67, 108-109, 131; 119, p. 91, 113; 122, p. 180-181, 383]

Therefore, we can see that these notions sometimes are similar in essence but sometimes – not. That is why we will use only the following notions — “small and medium-sized enterprises” (hereinafter — SMEs) and “small and medium-sized businesses” (hereinafter — SMBs). It must be mentioned that an enterprise and a business are not


similar because the last one does not include a non-commercial activity in accordance with dictionaries, but the category “small and medium-sized enterprises” in the context of the research is important mostly for the taxation where the non-commercial activity has its own legal peculiarities, which don’t influence on a question on tax control of commercial and non-commercial activity of SMEs. That is why SMEs and SMBs are similar phenomenon in the tax context. It does not cancel an opportunity to use such notions as small and medium-sized firms or companies, but their using is rare. Concerning other notions we think it is not correct to use them because they bear another essence.


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