SpanishCompanies Act (SCA) establishes in section 363.1 e), as a cause for mandatorydissolution, the existence of losses that reduce the net worth down to below50% of the share capital, unless share capital is increased or reducedsufficiently - and provided that it is not appropriate to request thedeclaration of insolvency.
Withthe COVID-19 pandemic, and the substantial losses suffered by companies, in2020, Law 3/2020 in section 13 granted the "corporate moratorium",putting the legal obligation to dissolve due to losses, “on hold”, untilthe end of the financial year beginning in 2024, thus giving companies moretime to absorb losses. In 2024, Royal Decree-Law 9/2024 extended the moratoriumin section 5 until the end of the financial year beginning in 2026, but it didnot have the approval of Congress, thus the extension could not be enacted.
Finally, Royal Decree-Law 4/2025 of 8 April in force since 09/04/2025, recoversthe moratorium so that, until the year beginning in 2025, the lossesaccumulated by COVID-19 in 2020 and 2021 shall not compute as base to trigger mandatorydissolution– which also allows to avoid forced exclusions from taxconsolidation groups -, and relieves Directorsfrom their duty to call the shareholders general meeting within the 2 months asrequired by the SCA, until the end of2025, and from their liability for debts imposed on them by the SCA (art.367).
Likewise, the Addenda Provision 1 of Royal Decree-Law 4/2025 allowsexceptional extension of the term to prepare company and consolidated annualaccounts for 2024 (and, where applicable, management reports and proposal ofresult distribution) - for those cases in which the directors have already issuedthem, they are allowed to be redraft within 1 month from 9th April2025. If they redraft the accounts: (a) the shareholders general approving theaccounts for the financial year 2024 must be held within 3 months from the dateof new accounts; (b) In the event that the notice of call for shareholdersgeneral meeting has already been published but the meeting has not been held,the directors may, upon, at least 72 hours in advance, modify the place, dateand time of the meeting, or revoke the call. If revoked, they must call a newshareholders general meeting within 1 after date of redrafted accounts.
Yet, these benefits do not apply to insolventcompanies: directors’ obligation to adopt the measures set the Insolvency Lawremain: to notify the court of ongoing negotiations with creditors for arestructuring plan or, where appropriate, to request insolvency declaration.
