Spain: Extension of Suspension of Dissolution Due to Losses Under New Tariff Response Measures

The ongoing tariff crisis has led to the reinstatement of the suspension of dissolution due to losses under Article 363.1(e) of the Capital Companies Law, originally introduced in response to COVID-19-related losses in 2020 and 2021. Additionally, an extraordinary extension has been granted for the preparation of annual accounts for the 2024 financial year.

On April 9, 2025, Royal Decree-Law 4/2025, issued on April 8, came into force, introducing urgent measures to counter the tariff threat and support commercial recovery (“RDL 4/2025”).

According to the Explanatory Memorandum, “the tariff policy recently announced by the United States administration will create challenges for certain sectors,” necessitating “a response plan that provides reassurance to our productive fabric through a network of instruments enabling companies to adapt to and mitigate the effects of this trade shock.”

To counter the “considerable impact on the economy” posed by high tariffs on European products imposed by the U.S. and reciprocal actions by affected global economies, RDL 4/2025 recognizes the need for additional time for companies to absorb losses stemming from the COVID-19 crisis. As a result, the period during which these losses are disregarded for dissolution purposes has been extended. Furthermore, if annual accounts were prepared before the decree’s enactment, they may be reformulated within one month, with the board convening within three months of the revised accounts.

Suspension of Dissolution Due to Losses

Article 6 of RDL 4/2025 reinstates provisions from Article 5.1 of RDL 9/2024, which was enacted on December 23, 2024, introducing urgent measures across economic, tax, transport, and social security domains. Although RDL 9/2024 came into effect on December 24, 2024, its lack of ratification by the Congress of Deputies rendered it inapplicable.

The reintroduced suspension of dissolution under Article 363.1(e) of the Capital Companies Act (“LSC”)—which occurs when losses reduce net worth to less than half of the share capital, unless adjusted or bankruptcy is declared—is structured as follows:

1. Losses from the 2020 and 2021 financial years will not be factored in until the end of the financial year beginning in 2025 (RDL 9/2024 previously extended this until 2026).

2. If, excluding losses from 2020 and 2021, financial results for 2022, 2023, 2024, or 2025 show net equity below half of the share capital, directors must call a general meeting within two months of the financial year’s end, or any shareholder may request it under Article 365 of the LSC. The company must proceed with dissolution unless the share capital is sufficiently increased or reduced.

Extraordinary Period for Annual Account Preparation

For companies that prepared their 2024 financial year accounts before RDL 4/2025’s enactment (March 31, 2025, for companies aligning their financial year with the calendar year), the decree grants an extraordinary adjustment period:

• Directors who had prepared the 2024 annual accounts before April 9, 2025, may restate them within one month (by May 9, 2025) to apply the suspension of dissolution due to losses.
• The general meeting for approving the 2024 financial year accounts must convene within three months following the revised accounts (by August 9, 2025).
• If the meeting notice was published before April 9, 2025, and the meeting has not yet been held, the governing body may adjust the venue, date, and time with at least 72 hours’ notice. If the meeting is revoked, a new call must be issued within one month of the reformulated accounts.

Legislative Ratification

Finally, RDL 4/2025 requires ratification by the Congress of Deputies within 30 days of its promulgation. Nevertheless, the decree remains effective, and any agreements adopted under its provisions during its validity will remain enforceable, even if not ratified.

By Marimón Abogados, Spain, a Transatlantic Law International Affiliated Firm.

For further information or for any assistance please contact spain@transatlanticlaw.com

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