Commission expands Temporary Framework to further support micro, small and start-up companies and incentivise private investments
The amendment extends the Temporary Framework to enable Member States to provide public support under the Temporary Framework to all micro and small companies, even if they were already in financial difficulty on 31 December 2019.
This will apply, unless such companies are in insolvency proceedings, have received rescue aid that has not been repaid, or are subject to a restructuring plan under State aid rules. Given their limited size and involvement in cross-border transactions, temporary State aid to micro and small companies is less likely to distort competition in the Internal Market than State aid to larger companies.
This amendment also effectively increases the possibilities to support start-up companies, the vast majority of which fall within the micro and small companies cluster, especially innovative ones which may be loss-making in their high-growth phase, which are crucial for the economic recovery of the Union.
The Commission recalls further that all small and medium-sized enterprises that were in existence for less than three years on 31 December 2019 could already benefit from the aid measures laid down in the Temporary Framework provided they are not in insolvency proceedings or have received rescue aid that has not been repaid or are subject to a restructuring plan under State aid rules.
The Commission has also adapted the conditions for recapitalisation measures under the Temporary Framework for those cases where private investors contribute to the capital increase of companies together with the State.