End of the accounting moratorium for companies

The Spanish Government had extended the Accounting Moratorium until December 2026 but Congress has rejected the measure.

In an economic context marked by uncertainty, financial difficulties and the aftermath of the pandemic, the Government of Spain had decided to extend the accounting moratorium for two more years. This is a measure by which, for the purposes of determining the cause of dissolution due to serious losses of a company, the losses of the financial years 2020 and 2021 were not taken into account.

This decision, which was scheduled to end on 31 December 2024, had been extended until 31 December 2026 by virtue of the Royal Decree-Law approved by the Government at the end of 2024. Its main objective was to provide relief to companies that are still dragging losses from the pandemic, giving them more time to assume them. Below, we explore what the accounting moratorium was, how it works and what has happened with this measure.

What is the accounting moratorium?

It is a cause for the dissolution of companies if the losses reduce the net assets to an amount less than half of the share capital. This is what is known as a cause for dissolution due to equity imbalance or qualified or serious losses.

When this situation occurs, the company's directors have the obligation, within 2 months, to convene the company's general meeting to adopt the dissolution agreement or those necessary to remove the situation of equity imbalance, unless they have requested the declaration of bankruptcy or communicated the start of negotiations with creditors to reach a restructuring plan.

The accounting moratorium is a legal measure by which the losses incurred in 2020 and 2021 are not taken into account for the purposes of determining whether this cause for dissolution due to qualified losses or equity imbalance occurs. 

With the accounting moratorium, companies that suffered serious losses in the toughest years of the pandemic had the possibility of postponing the adoption of the dissolution agreement or seeking another measure to correct the situation of equity imbalance such as a capital increase, a capital reduction to offset losses, an accordion operation (simultaneous capital reduction and increase),  a participative loan, etc.

Context of the accounting moratorium

The Spanish government initially approved the accounting moratorium in September 2020, as part of the measures to deal with the economic effects of the COVID-19 pandemic. At the time, many businesses had been forced to temporarily close or drastically reduce their activity due to government restrictions imposed to curb the spread of the virus. 

In this context, it was decided to temporarily suspend the cause for dissolution due to qualified or serious losses by which, for the purposes of determining said cause for dissolution of a capital company, the losses corresponding to the 2020 financial year would not be taken into consideration, subsequently extended to the losses also generated in 2021.

This measure was to be in force until the end of the financial year beginning in 2024, so that, when the annual accounts for the 2024 financial year are formulated, all the losses suffered in those two years (2020 and 2021) would already have to be taken into account. However, the Government at the last minute decided to extend the accounting moratorium until December 31, 2026, so that it would not be until the formulation of the 2026 accounts that the losses of 2020 and 2021 would have to be taken into account. Therefore, an additional period was granted to assume these losses and that it would not be until the first months of 2027 when they would have to face this problem.

Rejection by the Congress of Deputies

The new extension of the accounting moratorium was adopted by the government through a Royal Decree-Law approved on 23 December 2024 (RDL 9/2024), with many other measures, which has led to it being known as "Omnibus".

As is well known, the Royal Decree-Laws are a measure that the Government can adopt in cases of extraordinary and urgent need but that require validation by the Congress of Deputies.

The non-validation by the Congress of Deputies on 22 January 2025 of the Royal Decree-Law "Omnibus" means that it and all the measures it adopted, including the extension of the accounting moratorium, have lost their validity.

What Implications Does This Rejection Have Regarding the Moratorium?

With the rejection of Congress, the extension of the accounting moratorium until December 31, 2026 initially approved by the Government ceases to be in force.

Therefore, when drawing up the 2024 accounts (which they must do in the first three months after the end of the financial year), directors must take into account the losses suffered in the 2020 and 2021 financial years, which may result in many of them entering into a cause for dissolution, activating the duties of the directors to promote it or adopt measures to remove said cause,  under penalty of incurring the so-called liability for debts.

In the event of non-compliance, the directors will be liable for all debts after the occurrence of the cause for dissolution (i.e., when the losses reduce the net assets to half of their share capital), if they do not call the meeting to agree on the dissolution or other measures to remove the situation, unless they have requested bankruptcy or communicated the start of negotiations with the creditors or,  even if they do not promote their judicial dissolution if that meeting is not held or does not adopt any measure to remove the cause or agree to its dissolution.

Therefore, directors must be especially careful when formulating the 2024 accounts, especially if they had large losses in the toughest years of the pandemic since, if taking into account these losses they are in a situation of serious equity imbalance, the appropriate measures must be adopted in each case (dissolution, removal of the cause of imbalance,  bankruptcy or restructuring). If they do not do so, creditors can go directly to them to personally claim payment of the company's debts.

Our bankruptcy lawyers, experts in the field, can help you with the case of your company, to find alternative ways in case you are affected by this end of the accounting moratorium. Contact them here.

Área concursal y reestructuraciones