Tuesday, June 23, 2009

What IS a Small Business?

I happened to answer the phones one Friday afternoon and someone, who had been obviously been talking to other people, wanted a definitive answer to a simple question, "How is a small business defined?" I said, "Well, it depends."

If we're talking about New York State law, then you'll want to look for the state laws under COM: Economic Development Law, Article 4-B, § 131. Definition of a small business. For the purposes of this chapter, a small business shall be deemed to be one which is resident in this state, independently owned and operated, not dominant in its field and employs one hundred or less persons.

But if we're talking federal law, it's a bit more complicated. If one were to look at TITLE 13 of the Code of Federal Regulations, one would want to go to Part 121--SMALL BUSINESS SIZE REGULATIONS, with a plethora of information about the process. Still, for the bottom line, go to §121.201: What size standards has SBA identified by North American Industry Classification System codes? "The size standards...are [generally] expressed either in number of employees or annual receipts in millions of dollars."

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