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Understanding the Legal Definition of Small-Business Concern
Definition & Meaning
A small-business concern refers to a business that meets the criteria set forth in the Small Business Act. This definition includes specific provisions regarding ownership, operational independence, and size standards. Generally, a small-business concern must be independently owned and operated, and it should not be dominant in its field of operation. Additionally, certain investments from tax-exempt entities do not disqualify a business from being considered a small-business concern.
Table of content
Legal Use & context
The term small-business concern is primarily used in the context of federal and state regulations that govern small businesses. It is relevant in areas such as business law, taxation, and investment. Understanding this term is crucial for businesses seeking federal assistance, loans, or grants, as many programs are specifically designed for small-business concerns. Users can manage some legal requirements themselves using templates from US Legal Forms, which provide guidance on compliance and documentation.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A local bakery with fewer than fifty employees and annual revenue under a specified threshold qualifies as a small-business concern. This allows the bakery to apply for small business loans and grants.
Example 2: A tech startup that receives investment from a tax-exempt pension fund can still be classified as a small-business concern, as the investment does not affect its independent operation status (hypothetical example).
Relevant laws & statutes
Key statutes related to small-business concerns include:
Small Business Act (15 U.S.C. § 632) - Establishes the definition and criteria for small-business concerns.
Small Business Investment Act - Governs investment practices related to small businesses.
State-by-state differences
State
Criteria Variation
California
Has specific size standards based on industry classification.
Texas
Offers additional tax incentives for small businesses.
New York
Defines small businesses with different revenue thresholds.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Small business
A business that meets specific size criteria, often used interchangeably with small-business concern.
Independent contractor
A person or business that provides services to another entity under terms specified in a contract.
Entrepreneur
An individual who creates and manages a new business, often taking on financial risks.
Common misunderstandings
What to do if this term applies to you
If you believe your business qualifies as a small-business concern, consider the following steps:
Review the Small Business Act criteria to confirm eligibility.
Explore funding options available for small-business concerns, including loans and grants.
Utilize US Legal Forms to access templates that can help you with necessary documentation.
If your situation is complex, consider consulting a legal professional for tailored advice.
Find the legal form that fits your case
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