Firm in difficulty

One of the conditions that self-employed persons must fulfil in order to be able to claim a contribution from the State is that self-employed persons are not firms in difficulty as of 31 December 2019.

In determining whether a self-employed person is a firm in difficulty, a first of all distinguishes whether it is a small and medium-sized enterprise (SME) or not.

What is a small and medium-sized enterprise?

Small and medium-sized enterprises are those legal or natural persons who:
  • Employ < ako 250 osôb a
  • have an annual turnover of < 50 miliónov eur alebo hlavné aktíva < 43 miliónov eur

When is a small and medium-sized enterprise in difficulty?

In determining whether a small and medium-sized enterprise (SME) is in difficulty, it is important whether or not a SME has existed for less than 3 years.

SMEs have existed for less than 3 years

If a small and medium-sized enterprise has existed for less than 3 years, only one condition is pursued, namely whether the enterprise fulfils at least one of the conditions set out in the Bankruptcy Act, i.e. whether the

  • insolvency proceedings have been opened,
  • he has been declared bankrupt,
  • insolvency proceedings have been suspended due to a lack of assets, or
  • cancelled bankruptcy due to lack of assets.

If a SME fulfils at least one of these conditions, it is a firm in difficulty.

SMEs have existed for 3 years or more

Two conditions are monitored, namely whether

the undertaking fulfils at least one of the conditions laid down in the Bankruptcy Act, or
accumulated losses > 1/2 of the share capital

If a SME fulfils at least one of these conditions, it is a firm in difficulty.

Big business

When is a large company in difficulty?

A large enterprise is considered to be an
  • employs > than 250 persons, or
  • has an annual > of EUR 50 million or the main assets > EUR 43 million
Three conditions are monitored, namely whether
    • the undertaking fulfils at least one of the conditions laid down in the Bankruptcy Act, or
    • accumulated losses > 1/2 of the share capital, or
    • for the last 2 years, the accounting ratio of the enterprise's total liabilities to equity was >7.5 and the ratio of the enterprise's earnings before interest, taxation and depreciation (EBITDA) to interest expense < 1,0
If a large undertaking fulfils at least one of these conditions, it is a firm in difficulty. Formula for calculating a firm in difficulty.
Ing. Ján Svočák
Author of the article
Managing director of the company, tax advisor and entrepreneur in the field of business consulting and administrative services for small and medium-sized companies. He graduated from the University of Economics in Bratislava and has been involved in consulting, taxation and accounting since 2007. He speaks fluent English.
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