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Small and medium-sized enterprises (SMEs)

Family Business

Family Businesses constitute a substantial part of the existing European companies and have a significant role to play in the strength and dynamism of the European economy.

The Small Business Act already highlighted the role of family business and the need to exploit their full potential.
The European Commission has undertaken some specific actions to study the need for and the shape of possible future policy initiatives in favour of family business, especially small and medium enterprises.

The Directorate General for Enterprise and Industry of the European Commission has carried out specific activities on the family business sector.

The work of an Expert Group on Family Business, carried out between 2007 and 2009, has been concluded with a report.
A study "Overview of family business relevant issues" was completed in 2008 and used as an input into the work of the group. Family businesses benefit from all the policies and actions undertaken by the Directorate General for Enterprise and Industry.

Expert Group on Family Business

In 2007 an Expert Group on Family Business was created, bringing together experts nominated by the Member States and some experts from the field.
The purpose of the group was to discuss the main problems for family firms in the single market, to identify existing family business related research, good practices in the area of family business (SME related policies), and family business organisations (networks), and to give their input to the Commission on family business relevant issues.

The Expert Group concluded its work with a final report, which adopts a European definition of a family business, describes current challenges that family businesses are facing and leads to the identification of possible policy measures. Among the inputs into the report was the "Overview of family business relevant issues" study, available below.


The Expert Group adopted a common European definition, according to which a firm, of any size, is a family business, if:

  1. The majority of decision-making rights is in the possession of the natural person(s) who established the firm, or in the possession of the natural person(s) who has/have acquired the share capital of the firm, or in the possession of their spouses, parents, child or children’s direct heirs.
  2. The majority of decision-making rights are indirect or direct.
  3. At least one representative of the family or kin is formally involved in the governance of the firm.
  4. Listed companies meet the definition of family enterprise if the person who established or acquired the firm (share capital) or their families or descendants possess 25 per cent of the decision-making rights mandated by their share capital.

Family businesses can be very diverse: they can be small, medium sized or large, listed or unlisted.

Study "Overview of family business relevant issues"

The study was carried out in 2008 and surveys the EU Member States, EEA countries (Iceland, Norway and Liechtenstein) and candidate countries (Turkey, Croatia, and the former Yugoslav Republic of Macedonia). It covers the following topics:


The Commission will continue to play a role in disseminating information and good practices, as well as to mainstream family-business-relevant issues in all relevant policies.

National governments should consider adopting measures to create a more favourable environment for family businesses, for example in areas of taxation, company law, and the educational system.
There should also be a specific family business contact point in national administrations.

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