# Commission Decision of 18 December 2012 on the adoption of the Rules to ensure consistent verification of the existence and legal status of participants, as well as their operational and financial capacities, in indirect actions supported through the form of a grant under the Seventh Framework Programme of the European Community for research, technological development and demonstration activities and under the Seventh Framework Programme of the European Atomic Energy Community for nuclear research and training activities (Text with EEA relevance) (2012/838/EU, Euratom) (revoked), Division 1.1.3.1: Definitions

Extent: E+W+S+N.I.
Status: repealed

1..‘Public body’ means according to Article 2(13) of the EC FP7 RP and Article 2(12) of the EURATOM FP7 RP any legal entity established as such by national law, and international organisations. ‘Established as public body by national law’ means
(1)incorporated as a public body in the formal act of creation or recognised as public body by the national law and
(2)governed by public law.
However, public bodies may act and be subject to private law for some or most of their activities. A legal entity established under private law with a public service mission is not considered as a public body according the FP7 RP.
2..‘Non-profit public body’ (Article 32(5) and Article 33(1) of the FP7 RP) means any legal entity which cumulatively meets the conditions of being a ‘public body’ and of being a ‘non-profit organisation’.
3..‘Non-profit organisation’ means a legal entity which by its legal form is non-profit-making and/or which has a legal or statutory obligation not to distribute profits to its shareholders or individual members. The decisions of the managing board, associates, stakeholders, members or representatives of the organisation on the distribution of profits are not considered as sufficient elements to prove the non-profit nature of an entity.
4..‘Research organisation’ means according to Article 2(7) of the EC FP7 RP and Article 2(7) of the EURATOM FP7 RP a legal entity established as a non-profit organisation which carries out research or technological development as one of its main objectives. The definition of ‘non-profit organisation’ set forth in point 3 above shall apply. The mere financing of research activities carried out by other entities, the dissemination of knowledge and the promotion or coordination of research activities are not considered as research activities within the sense of this definition.
5..‘Secondary and higher education establishment’ means a legal entity which is recognised as such by its national education system, being either a public or a private body.
6..‘SMEs’ mean according to Article 2(14) of the EC FP7 RP and Article 2(13) of the EURATOM FP7 RP micro, small and medium-sized enterprises within the meaning of Recommendation 2003/361/EC.
(a)According to Article 1 of the Annex of Recommendation 2003/361/EC an enterprise is considered to be any entity engaged in an economic activity, irrespective of its legal form. This includes, in particular, self-employed persons and family businesses engaged in craft or other activities, and partnerships or associations regularly engaged in an economic activity.
(b)According to Article 2(1) of the Annex of Recommendation 2003/361/EC the category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons (expressed in annual working units as defined in Article 5 of the Recommendation) and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million.
(c)The following definitions shall apply in addition to those set out in Recommendation 2003/361/EC:
(i)A legal entity is considered to be engaged in an economic activity, if it proves to be involved in any form of trade or activity done for remuneration or pecuniary interest in a given market. In general, any activity consisting in offering goods or services on a given market is an economic activity.
(ii)The following shall not be considered economic activities
(1)Activities which do not entail some sort of pecuniary offset; or
(2)Activities for which there is no given/direct market; or
(3)Activities for which the income generated is not distinct from the personal income of its members or shareholders.
(d)For non-autonomous SMEs (partner enterprises and linked enterprises as set forth in Article 3(2) and (3) of the Annex of Recommendation 2003/361/EC), that is SMEs owned or controlled by other enterprises (‘upstream enterprises’) or which own or control others (‘downstream enterprises’) the data of upstream and downstream enterprises shall be used according to Article 6(2) to (4) of Recommendation 2003/361/EC to determine whether the enterprise meets the criteria to qualify as an SME.
(e)According to Article 4(2) of the Annex of Recommendation 2003/361/EC, SME status is only lost after exceeding the ceilings stated in Article 2 of the Recommendation over two consecutive accounting periods. This rule is not applicable if an SME is merged or acquired by a larger group, in which case the SME shall lose its status immediately from the date of the transaction.
Therefore, applicants who had their validation as SME refused on grounds of having exceeded the ceilings stated in Article 2 of Recommendation 2003/361/EC during the last accounting period shall get the validation reversed if they prove that those ceilings were not reached in the second-last accounting period. This does not apply if an SME has exceeded the thresholds as a result of a merger or acquisition.

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Source: https://www.legislation.gov.uk/eudn/2012/838/annex/division/2/division/1/division/1.1/division/1.1.3/division/1.1.3.1 (the official version)
Page: https://openlegislation.uk/eu-decision-2012-838/annex/division-2/division-1/division-1.1/division-1.1.3/division-1.1.3.1
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.