Article 2:407 DCC: when consolidation may be omitted

The short answer

Article 2:407 DCC provides three exceptions to the obligation to consolidate. Paragraph 1 keeps companies out of the consolidation that are negligible together, whose data can only be obtained at disproportionate cost, or that are held solely for sale. Paragraph 2 exempts small groups, unless the general meeting objects in time. Paragraph 3 deals with two cooperating group heads.

Updated 30 October 2026

Key facts

Paragraph 1: what may stay out of the consolidation

1. The obligation to consolidate does not apply to data:

a. of companies to be included in the consolidation whose collective significance is negligible in relation to the whole,

b. of companies to be included in the consolidation whose necessary data can only be obtained or estimated at disproportionate cost or with great delay,

c. of companies to be included in the consolidation in which the interest is held solely with a view to its disposal.

• a. Negligible. The test is collective: ten small subsidiaries that each count for little may count together. Omission is allowed only if the total does not change the picture of the group.
• b. Disproportionate cost or great delay. According to RJ 217.306 this is an exception for rare cases, such as a newly acquired company whose figures do not yet run on the group system. For a significant subsidiary, “it takes effort” is no reason.
• c. Solely for sale. The interest was acquired with the aim of selling it again. RJ 217.307 requires that a sale within a year is likely and that there is already a decision, a plan and a start of execution. Such an interest is then presented on the balance sheet as a security, not as a participating interest (RJ 217.513).

A company that stays outside the consolidation under paragraph 1 does not disappear from the annual accounts. It appears in the list under art. 2:414 DCC, with the reason why it is not consolidated.

Paragraph 2: the exemption for a small group

2. Consolidation may be omitted if

a. on consolidation the limits of Article 396 would not be exceeded;

b. none of the companies to be included in the consolidation is a legal entity as referred to in Article 398(7);

c. no written objection has been made to the legal entity by the general meeting within six months after the start of the financial year.

Part a measures the group “on consolidation”: with the figures as they would be after elimination of intra-group receivables, supplies and participating interests. The sum of the separate annual accounts is generally higher and therefore a safe upper limit; if that already stays within the limits, the consolidated position certainly does. Because the law refers to Article 2:396, the rules of that article apply too: two of the three criteria, on two consecutive balance sheet dates. According to RJ 217.211 and RJk B3.301 this comes down to the group qualifying as small or micro.

Part b excludes groups that contain a public-interest entity: a listed company, a bank, an insurer or an entity designated by order in council (art. 2:398(7) DCC).

Part c gives the general meeting the final say. It can object in writing within six months after the start of the financial year; the group must then consolidate that year after all. This concerns a decision of the meeting as a body. A single minority shareholder cannot do this alone, unlike with the intermediate holding company of art. 2:408 DCC, where one tenth is already enough.

Paragraph 3: two group heads that cooperate

3. If the legal entity manages group companies under a cooperation arrangement with a legal entity whose financial data are not included in its consolidated annual accounts, it may keep its own financial data out of the consolidated annual accounts. This applies only if the legal entity has no activities other than managing and financing group companies and participating interests, and if it applies Article 389 in its balance sheet.

Paragraph 3 was written for groups with two top companies that run the group together, each with its own circle of shareholders. A pure management and financing holding company that values its participating interests at net asset value may then keep its own figures out of the consolidated annual accounts (RJ 217.311). In the SME segment this rarely occurs.

Which groups benefit from Article 2:407 per size class

The limits above apply to financial years from 2024. Note the link with the size class of the holding company itself: it counts the group (art. 2:396(2) DCC), even if it does not consolidate thanks to paragraph 2. A small group therefore yields a holding company that is at most small.

Deadlines for the financial years 2025, 2026 and 2027

Article 2:407 is unchanged for these three financial years. For a financial year equal to the calendar year, the objection period of part c runs up to and including 30 June: in 2025, in 2026 and in 2027. For financial year 2026 that period has therefore expired; if the general meeting made no written objection before 1 July 2026, part c no longer stands in the way of the exemption for 2026. In the RJ, chapter 217 has been reorganised for financial years from 1 January 2027; the paragraph numbers on this page are those of the new edition.

Case: a construction group that stays just within the small limits

Van Dijk Groep BV holds all shares in Van Dijk Bouw BV and Van Dijk Installatie BV. The three supply a lot to each other and the holding company lends money to the subsidiaries.

On the sum, the group would exceed two small limits. Consolidated, it stays below all three. For 2025 the picture was similar: € 6,9 mln assets, € 13,4 mln turnover and 44 employees. There is no public-interest entity in the group. If no written objection from the general meeting has come in up to and including 30 June 2026, Van Dijk Groep does not have to prepare consolidated annual accounts for 2026. It is itself a small legal entity, because its class is measured on the group.

Variant: Peter van Dijk holds 60% of the holding company, his sister 25% and an investor 15%. The sister and the investor want to see group figures. Together they have no majority, so without Peter there is no objection from the meeting. If Peter votes with them on 14 April 2026, the objection is in time and the group must consolidate for 2026 after all. In addition, the group has a Belgian subsidiary with € 35.000 in assets and no activities. Under paragraph 1 part a it may stay outside the consolidation; it appears in the notes with the reason.

Where the small-group exemption is applied wrongly

• Testing on the holding company’s figures alone. The law looks at the group on consolidation.
• Taking one good year as proof. The class follows from two consecutive balance sheet dates, with the same transitional rules as for an entity’s own class.
• Overlooking a bank, insurer or listed company in the group (paragraph 2 part b).
• Treating an objection by a minority shareholder as an objection by the general meeting, or still counting an objection after 30 June for that financial year.
• Keeping an interest “for sale” out of the consolidation without a sale plan and without a sale in sight within a year.
• Also omitting companies that stay out of the consolidation under paragraph 1 from the notes. They belong, with the reason, in the statement under art. 2:414 DCC.

What applies alongside Article 2:407

• Article 2:406 DCC: the obligation to which this article makes an exception.
• Article 2:408 DCC: the intermediate holding company, with a right of objection for one tenth of the members or holders of one tenth of the issued capital.
• Article 2:396 DCC and Article 2:398 DCC: the small limits and the public-interest entities.
• Articles 2:405–2:414 DCC: the statement of non-consolidated companies.
• RJ 217, the size criteria and does a holding company have to consolidate?.

How it works in Jaarrekening.io

For each financial year, Jaarrekening.io has a checklist for art. 2:407(2). The app derives parts a and b from the recorded consolidation and the data of the companies; for part c you record that no objection came in within six months. The group size test is indicative and looks at both balance sheet dates. As long as no consolidation has been calculated, the app prudently works with the sum; after that, the consolidated figures decide. A stock exchange listing or a recorded public-interest entity category for a company to be consolidated switches the exemption off.

Sources

• Art. 2:407 DCC: exemptions from consolidation, text in force from 1 July 2026 (wetten.overheid.nl, in Dutch)
• Art. 2:396 DCC: limits for small legal entities, text in force from 1 July 2026 (wetten.overheid.nl, in Dutch)
• Art. 2:398 DCC: public-interest entities (paragraph 7), text in force from 1 July 2026 (wetten.overheid.nl, in Dutch)
• Art. 2:414 DCC: statement of non-consolidated companies, text in force from 1 July 2026 (wetten.overheid.nl, in Dutch)
• Guidelines for annual reporting (rjnet.nl, in Dutch)

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