Validation Process and financial capacity assessment

Registration of your organization
Before submitting an application, all participants involved in the proposal must first be registered in the Portal Participant Register and have their 9-digit Participant Identification Code (PIC number).
You can verify directly on the Portal whether your organisation is already registered and has a PIC (In order to avoid creating duplicate PICs). If not, please proceed with the registration following the instructions on the same page (the Registration wizard will help you through the process). Detailed explanations are available in the HOW TO. Once completed, you get the PIC to be used in your online application form and further correspondence with the EU services.
If you do not have an user account (EU Login), you will first need to create one, before starting the registration process. If you already have a user account (EU Login), you can log in and directly start registration.
To register your organisation, you will need to provide basic administrative and legal information, in addition to contact details. Since the declared information will be verified against supporting documents later on, it is useful to have the relevant documents at hand when you complete the registration, to make sure you fill in everything correctly (legal form, non-profit, public/private, etc.)
 
PIC number
After completing a new registration, you will receive the 9-digit Participant Identification Code (PIC) — to be used in your online application form and further correspondence with the EU services. Nothing else is expected from you after the PIC has been generated, the Central Validation Service will contact you later, to initiate the validation process.

Validation of your organisation
If your proposal is successful, you will be contacted for the validation of your PIC registration data. Validation is needed only for certain types of participants (grants: Beneficiaries and Affiliated Entities; procurement: Contractors). It is not needed for Associated Partners, Subcontractors or other participants.
It will be done by the Central Validation Service which carries out the validation for all EU services using the Portal.
The Central Validation Service will contact the person who registered the organisation (Self-registrant) and ask them to upload official supporting documents (via the My Organisations page) and clarify any details.
The documents that are required will be listed in the notification you receive. You will need to fill out a legal entity identification form and provide an official VAT document, registration extract, statutes or act of establishment, etc. The detailed list of documents is also explained in the Rules on Legal Entity Validation, LEAR appointment and Financial Capacity Assessment.
The Central Validation Service will check that your organisation is legally recognised (has legal personality). If this is not the case (exceptionally this is allowed), you will have to prove that the representatives have the capacity to undertake legal obligations on the organisation's behalf and that the organisation has financial and operational capacity equivalent to that of legal persons.
The Central Validation Service will also check whether your organisation qualifies for some of the special legal statuses that are required for some funding programmes (private or public body, non-profit, international organisation).
The outcome of this process is the validation of your organisation (validated PIC). The Central Validation Service will send a confirmation message once the process is completed and the PIC is validated.
Please don't forget that all communications with the Central Validation Service must take place through the Participant Register (My Organisations page). Emails and other communications will NOT be accepted.
Please also note that if you apply for a call with specific eligibility criteria that are not validated by the Central Validation Service, these will be checked by the responsible EU service managing the call — in addition to the validation, which means that they may come back to you with additional questions.
Validation of the organisation is a prerequisite for the LEAR appointment.

LEAR appointment and validation
Parallel to the validation of your organisation, you will be requested by the Central Validation Service to appoint your Legal Entity Appointed Representative (LEAR).
This must be done by a legal representative of your organisation with the necessary legal authority to commit the organisation for this type of decisions (e.g. typically CEOs, rectors, Director-Generals, etc).
The LEAR role can be performed by any member of the organisation (typically from the central administration). They are formally nominated to manage your organisation's use of the Portal and thus bear the final responsibility for all the actions in the Portal. Once validated, they will be responsible for:
•    keeping an overview of all the proposals/projects/contracts your organisation is involved in
•    managing all the legal and financial information about your organisation
•    managing the access rights at organisation-level (and read-only access at project-level)
•    appointing the persons which will be able to electronically sign grants/contracts (Legal Signatories — LSIGNs) and cost claims/invoices (Financial Signatories — FSIGNs).
Applicants that are natural persons do not need to prove their capacity to become a LEAR, but still need to enter their LEAR data and submit supporting documents.
Further details about the LEAR's rights and responsibilities are explained in the Roles and access rights section.

Assessment of your financial capacity
For some participants, we will also have to check the financial capacity before awarding grants/contracts.
For grants, the criteria for checking financial capacity are set out in the call conditions.
Normally, the financial capacity assessment will be done for all Beneficiaries and Affiliated Entities, except:
•    public bodies (entities established as public body under national law, including local, regional or national authorities) or international organisations
•    if the individual requested grant amount is EUR 60,000 or below.
Specific rules apply for some programmes (i.e. only for coordinators; only for grants above a certain threshold; State guarantee; see Horizon Europe Programme Guide, Erasmus+ Programme Guide).
The Central Validation Service will contact you during grant preparation to upload the necessary financial documents (My Organisations > Actions > Modify Organisation).
The documents required will be listed in the notification you receive. In general, you will need to provide documents showing your financial situation for the last two closed financial years (profit and loss account and balance sheet, business plan, audit report produced by an approved external auditor, certifying the accounts for the last closed financial year, etc.)
The analysis is based on neutral financial indicators (liquidity, financial autonomy, solvency and profitability), but will also take into account other aspects, such as dependency on EU funding and deficit and revenue in previous years. The results of your financial capacity assessment will be taken into account when evaluating your ability to implement the project (and to take on the Coordinator role, if it is the case).
If we consider that your financial capacity is not satisfactory, The Central Validation Service may require:
•    an enhanced financial responsibility regime, i.e. joint and several liability for all Beneficiaries or joint and several liability of Affiliated Entities
•    prefinancing paid in installments (multiple/additional prefinancing)
•    (one or more) prefinancing guarantees
or
•    propose no prefinancing or
•    request that you are replaced or, if needed, reject the entire application.
Specific rules apply to programmes with Mutual Insurance Mechanism (MIM, former Participant Guarantee Fund; e.g. Horizon Europe). For these programmes, prefinancing guarantees and joint and several liability of Beneficiaries are normally excluded.

You can check your financial capacity yourself by using the Financial capacity self-check simulator (it is only a simulation: If a formal financial capacity assessment is required, you will have to go through the formal procedure).