Definitions

For the purposes of this Regulation, the following definitions apply:

(1) 'undertaking' means an entity engaged in an economic activity, regardless of its legal status and the way in which it is financed, including all linked enterprises within the meaning of Article 3(3) of the Annex to Recommendation 2003/361/EC;

(2) 'covered undertaking' means an undertaking designated pursuant to Article 3;

(3) 'automated cognitive services' means services whose provision depends to a significant extent on software systems, including artificial intelligence systems within the meaning of Article 3(1) of Regulation (EU) 2024/1689, performing tasks that would otherwise require human cognitive labour;

(4) 'citizens' capital warrant' means a financial instrument issued pursuant to Article 5 which confers the right to subscribe for shares in a covered undertaking;

(5) 'Reserve' means the European Citizens' Capital Reserve established by Article 8;

(6) 'liquidity event' means any of the following:
(a) the admission of shares of the covered undertaking to trading on a regulated market or multilateral trading facility, in the Union or in a third country;
(b) a change of control of the covered undertaking;
(c) one or more transactions within any period of 12 months by which shares representing at least 20 % of the capital of the covered undertaking are transferred for consideration;

(7) 'change of control' means the acquisition, directly or indirectly, of decisive influence over the covered undertaking within the meaning of Article 3(2) of Regulation (EC) No 139/2004;

(8) 'full-time equivalent' means the annual working time of one person employed full time, calculated in accordance with Annex I and including labour contracted from third parties in accordance with point 3 of that Annex;

(9) 'fair market value' means the value determined in accordance with Annex I on the basis of the most recent funding transaction, independent valuation or observable market price, whichever is most recent;

(10) 'holder' means a natural person in whom an entitlement is vested pursuant to Article 10;

(11) 'national vehicle' means the body or arrangement designated by a Member State pursuant to Article 11 to administer entitlements;

(12) 'distribution' means a payment made from the Reserve to holders pursuant to Article 10.