Article Corporate & M&A

403, Consolidated financial statements: is that it?

12 juni 2026

A '403 statement' within a group structure may provide considerable administrative relief. However, this does not mean that the company concerned is no longer required to draw up its standalone annual accounts. Even where the company's financial information is included in consolidated annual accounts, certain important regulations remain to be met. This blog sets out certain matters directors must take into account and the risks that can arise when standalone annual accounts have not been drawn up.

Eline Holtman

Candidate notary - Senior

Does a 403 declaration confer an exemption from the obligation to draw up standalone annual accounts?

The 403 declaration is frequently used within group structures to benefit from the accompanying facilities under Dutch (annual accounts) law, including exemption from certain layout requirements in respect of the annual accounts, from prescribed mandatory audit, and from the obligation to file the standalone annual accounts at the Dutch trade register.

It should however be noted that since Book 2 of the Dutch Civil Code defines "annual accounts" as comprising both the standalone annual accounts - consisting of the balance sheet and profit and loss account with notes - and the consolidated annual accounts (section 2:361 DCC), (ordinary) companies whose financials are included in the consolidated annual accounts of the consolidating group company must be aware of the following:

The company concerned is still required to maintain proper accounting records and to prepare its own standalone annual accounts on an annual basis, though in simplified form due to the exemptions provided under the 403 facility. In principle, the standalone annual accounts must be prepared within five months of the end of the company's financial year. In exceptional circumstances, an extension of up to five months may be granted, resulting in a maximum period of ten months for the preparation of the annual accounts.
In the event of legal mergers and demergers, the company concerned must, in addition to the consolidated annual accounts, also file the standalone annual accounts at its offices in accordance with the provisions of section 2:314(2) DCC.

What risks can directors face when it is omitted to prepare standalone annual accounts?

Failure to comply with the obligation to prepare standalone annual accounts may give rise to the finding that the board has not fulfilled its duties properly (pursuant to sections 2:101/210 and 2:10 DCC, which require the board to prepare the company's annual accounts after the end of each financial year). Furthermore, in the event of the company's bankruptcy, failure to prepare annual accounts may, in certain circumstances, result in directors' liability.

Concluding

The 403 facility does not release the company or companies for whose benefit the 403-statement has been issued from the obligation to prepare its standalone annual accounts; it merely exempts the company from certain layout requirements and from the publication obligation. In short, even when making use of the 403 facility, standalone annual accounts must always be prepared (to de drawn up with making use of the available exemptions).