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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
The Magna Carta for Micro, Small and Medium Enterprises classifies an enterprise as a Micro Enterprise if it has total assets amounting to not more than Three Million Pesos (PhP3,000,000.00).
A Small Enterprise is classified as such if it has total assets amounting to more than Three Million Pesos but not more than Fifteen Million Pesos (PhP3,000,001 to PhP15,000,000).
A Medium Enterprise is classified as such if it has total assets amounting to more than Fifteen Million Pesos but not more than One Hundred Million Pesos (PhP15,000,001 to PhP100,000.00)
Source: Section 3, R.A. No. 6977 or the Magna Carta for Micro, Small and Medium Enterprises, as amended by R.A. No. 9501)
Republic Act No. 9501 (the act to promote entrepreneurship by strengthening development and assistance programs to Micro, Small and Medium Enterprises, amending for the purpose Republic Act No. 6977, as amended, otherwise known as the “Magna Carta for Small Enterprises” and for other purposes) amended Republic Act 6977 into the “Magna Carta for Micro, Small and Medium Enterprises (MSMEs)”.
It amended Section 3 of R.A. No. 6977 which defined small and medium enterprises. Under R.A. No. 9501, the definition included micro enterprises and the asset size requirement for each category was amended.
The law says:
SEC. 3. Section 3 of the same Act, as amended, is hereby further amended to read as follows:
“SEC. 3. Micro, Small and Medium Enterprises (MSMEs) as Beneficiaries. — MSMEs shall be defined as any business activity or enterprise engaged in industry, agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, must have value falling under the following categories:
Micro: not more than P3,000,000.00
Small: P3,000,001 – P15,000,000
Medium P15,000,001 – P100,000.00
“The above definitions shall be subject to review and adjustment by the Micro, Small and Medium Enterprises Development (MSMED) Council under Section 6 of this Act or upon recommendation of sectoral organizations concerned, taking into account inflation and other economic indicators. The Council may use other variables such as number of employees, equity capital and assets size.
“The Council shall ensure that notwithstanding the plans and programs set for MSMEs as a whole, there shall be set and implemented other plans and programs varied and distinct from each other, according to the specific needs of each sector, encouraging MSMEs to graduate from one category to the next or even higher category.” (Section 3, R.A. No. 9501)
Are employees of micro, small and medium enterprises enjoy protection under labor laws?
Yes. In the case of Dominga Cabu-os doing business under the name Kem’s Store v. Teresita Espina (G.R. No. 228719, August 08, 2022), the Supreme Court ruled that employees of micro businesses and enterprises are entitled to protection under labor laws.
Jurisprudence says:
“Employees of barangay micro businesses and enterprises are entitled to all the protections the labor laws may provide. However, considering the minuscule profit-earning capacity of these businesses and their exemptions from the payment of minimum wage, labor tribunals must compute judgment awards in an equitable manner.”
Read also: Micro, Small and Medium Enterprise Development Week
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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