Extension of the 2025 Accounting Moratorium: legal implications for commercial companies
The recent approval of Royal Decree-Law 4/2025 of 8 April introduces a new extension to the accounting moratorium concerning the legal regime of dissolution due to losses in commercial companies. This measure, effective until 31 December 2025, once again suspends the inclusion of losses incurred during the 2020 and 2021 financial years for the purposes of determining whether a company is in a legal situation of mandatory dissolution under Article 363.1(e) of the Spanish Companies Act (Ley de Sociedades de Capital, LSC).
The aforementioned article establishes that a company must be dissolved if its net equity is reduced due to losses to an amount less than half of its share capital, unless the share capital is increased or reduced to a sufficient extent. In response to the economic crisis resulting from the COVID-19 pandemic, the legislature adopted various measures to prevent the immediate accounting impact from forcing the dissolution of thousands of companies. Thus, Law 3/2020 of 18 September excluded losses from 2020 from the calculation; Law 14/2022 extended this exemption to losses from 2021. Now, Royal Decree-Law 4/2025 reactivates this exemption until the end of 2025.
What are the implications of the 2025 accounting moratorium?
With this new moratorium, losses generated during 2020 and 2021 will not be taken into account in assessing whether the legal grounds for dissolution exist until the end of the first financial year beginning on or after 1 January 2025. This means that the relevant calculation will be based on the annual accounts for 2025 (which will be prepared and approved in 2026).
This provision will allow many companies that have not yet fully recovered from the impact of the pandemic to continue operating without having to adopt drastic measures such as dissolution or compulsory capital reduction. From a corporate governance perspective, the regulation temporarily relieves directors of the immediate obligation to convene a general meeting to restore the equity balance, as required under Article 365 of the LSC.
Risks and duties of directors under the accounting moratorium
However, this temporary exemption from liability does not mean that directors are relieved of their duty to exercise diligent oversight of the company’s financial position. On the contrary, they must continue to monitor the company’s financial health and realistically plan for recovery scenarios, since the grounds for dissolution could be triggered in 2026 if corrective measures are not implemented.
However, this temporary exemption from liability does not mean that directors are relieved of their duty to exercise diligent oversight of the company’s financial position. On the contrary, they must continue to monitor the company’s financial health and realistically plan for recovery scenarios, since the grounds for dissolution could be triggered in 2026 if corrective measures are not implemented.
Preventive strategies to avoid dissolution in 2026
In this context, it becomes especially important to implement preventive measures during 2025, including:
Capital increases: through cash contributions or debt-for-equity swaps.
“Accordion” operations: reducing capital to offset losses, followed by a simultaneous capital increase.
Participating loans: which may be treated as equity for the purposes of Article 363 LSC.
These operations not only strengthen the company’s balance sheet but also project an image of solvency and commitment, which can be crucial in financing rounds, mergers, or the sale of the business.
Impact of the accounting moratorium on audits and M&A transactions
In the context of company acquisitions or the entry of investors, the effects of the moratorium must be carefully assessed during due diligence processes — both for the purpose of adjusting valuations and for establishing price adjustment mechanisms or warranties (reps and warranties) linked to the company’s true financial health, regardless of the temporary effect of the moratorium.
This situation must also be clearly addressed in the audit report: whether the company is making use of the legal exemption, and whether there are reasonable doubts about its future viability. These factors directly affect the assessment of the going concern principle.
The extension of the accounting moratorium approved by Royal Decree-Law 4/2025 offers a temporary reprieve for many companies still dealing with the aftermath of the post-COVID crisis. However, it must not be seen as an absolute waiver of responsibility or a permanent solution. Company groups should take advantage of this time window to adopt strategic decisions that strengthen their equity position and avoid dissolution becoming inevitable once the moratorium ends. From a legal standpoint, there is a heightened need for comprehensive advice that combines corporate, accounting, and financial perspectives.
Do you need advice? Access our area related to the extension of the accounting moratorium: