Family enterprises as defined by IfM Bonn

The generic/over-arching term "Mittelstand" can be defined in a quantitative way (based on enterprise size) as small and medium-sized enterprises (SMEs) and in a qualitative way (based on ownership and management structure) as family enterprises. The central criterion of family enterprises is the so-called unity of ownership and management: The company is owned and managed by members of the same family.

There is no single compelling/logical way of how to define a family enterprise in practice (i.e. with regard to required ownership and management structures). In its studies, IfM Bonn defines a family enterprise as an enterprise where up to two natural persons or their family members have at least 50 % ownership of the company and where these natural persons are also involved in the management of the company.

Although there is widespread overlapping between SMEs and family enterprises, (qualitatively defined) family enterprises come up for approx. every third (quantitatively defined) large enterprise with more than 500 employees and an annual turnover exceeding 50 million €.

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