# Commission Decision of 18 December 2012 on the adoption of the Rules to ensure consistent verification of the existence and legal status of participants, as well as their operational and financial capacities, in indirect actions supported through the form of a grant under the Seventh Framework Programme of the European Community for research, technological development and demonstration activities and under the Seventh Framework Programme of the European Atomic Energy Community for nuclear research and training activities (Text with EEA relevance) (2012/838/EU, Euratom) (revoked), Division 3.4.1: Legal persons

Extent: E+W+S+N.I.
Status: repealed

At the negotiation stage, and in compliance with FP7 RP:
Each legal person subject to a verification of its financial capacity shall provide the validation services for the last financial year for which the accounts are closed:
Balance sheet;
Profit and loss account;
Statutory audit report on the 2 above financial statements if available. If the statutory reports are available, no further audit report is required.
Each legal person subject to a verification of its financial capacity is required - by the validation services - to complete the synthesis of its last available balance sheet and profit and loss account in a specific format called ‘Simplified accounts’ (via the Research Participant Portal or by other means).
Each legal person subject to a verification of its financial capacity requesting an estimated EU financial contribution exceeding EUR 500 000 shall provide the validation services with a full audit report certifying the accounts of the last available financial year. It can only be delivered by a professionally qualified external auditor.
As a general rule, no prospective financial data should be used, except in the case of ‘young’ legal entities (such as start-up companies) without any closed accounts. For these legal entities, a Business Plan will be required (especially ‘young’ SMEs) or (a) similar relevant document(s) of prospective activities.
Only the non-consolidated financial statements related to the validated entity are accepted for the purpose of financial viability checks even if the entity has linked or partner enterprises.
If the entity, in its capacity as a parent company (upstream enterprise) of a group of enterprises, is exempt from publishing a non-consolidated profit and loss account under its national legislation, the validation services can require the synthesis of the non-consolidated profit and loss account in a specific format (‘Simplified accounts’).
If the entity, in its capacity as a subsidiary of a parent company (downstream linked applicants), is exempt from a statutory audit under its national legislation and only the consolidated statements are available, the validation services can limit their request to the synthesis of the non-consolidated balance sheet and the profit and loss account in a specific format (‘Simplified accounts’), supported by a copy of the official consolidated financial reports of the parent company and the related audit reports. Nevertheless, if such entity requests more than EUR 500 000 EU contribution, a full audit report certifying the non-consolidated accounts of the last available financial year for the subsidiary has to be provided.

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Source: https://www.legislation.gov.uk/eudn/2012/838/annex/division/2/division/3/division/3.4/division/3.4.1 (the official version)
Page: https://openlegislation.uk/eu-decision-2012-838/annex/division-2/division-3/division-3.4/division-3.4.1
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.