The Small Business Administration (SBA) determines size standards based on North American Industrial Classicization Codes (NAICS).
Size standards vary by industry and NAICS code, so if your company offers products and services that fall under more than one NAICS code, you could find yourself in a position where you are considered a ‘Small Business’ under one code, but ‘Other Than Small’ under another!
Affiliates – the Power to Control:
When you calculate the size of your business, you must include the annual receipts and the employees of all affiliated companies. When another person or business can control your business, they are an affiliate. This is true even if they don’t exercise their control.
Even if an external party has less than a 50% ownership, affiliation could be established if there is a contractual arrangement between the companies, or if another party owns a large share of the company compared to any others.
Check out the Code of Federal Regulations (CFR 121.103) and the SBA’s Affiliation Guide to Size Standards for more detailed information.