In March 2026, a new extension has been approved regarding one of the most relevant corporate measures introduced during the COVID-19 pandemic: the exclusion of certain losses for the purposes of determining whether a company must be dissolved.
Specifically, Royal Decree-Law 7/2026, of March 20, has reinstated the suspension of the legal ground for dissolution set out in Article 363.1.e) of the Spanish Companies Act, extending its application until the end of the financial year starting in 2026.
What does this measure consist of?
As a general rule, a company must be dissolved when its losses reduce its net equity to an amount below half of its share capital. However, in response to the economic impact of the pandemic, an exception was introduced to prevent otherwise viable companies from being forced into dissolution due to temporary losses.
Under this exceptional regime, losses incurred during the financial years 2020 and 2021 are not taken into account when assessing whether this dissolution cause applies.
Evolution of the measure:
This is not a new measure, but rather part of an exceptional legal framework that has been extended several times:
– Initially introduced by Law 3/2020 in response to COVID-19.
– Subsequently extended through various regulations in 2021, 2022, and 2025.
– Now extended again by Royal Decree-Law 7/2026.
This continued extension reflects the ongoing economic effects of the pandemic on businesses.
Until when does it apply?
The key update is that the exclusion of losses from 2020 and 2021 now remains in force until the end of the financial year starting in 2026.
This means that, when assessing a company’s financial position in financial years such as 2022, 2023, 2024, 2025, or even 2026, those losses must be disregarded.
However, if after excluding these losses the company’s net equity still falls below half of its share capital, the legally required measures must be adopted (such as calling a shareholders’
meeting, recapitalization, or dissolution).
The regulation also introduces additional measures, including the possibility to restate annual accounts in certain cases, as well as greater flexibility in convening shareholders’ meetings, providing companies with more room to react.
Conclusion:
The extension of this measure provides relief for many companies, as it prevents extraordinary pandemic-related losses from automatically triggering a legal cause for dissolution.
Nevertheless, it remains essential to carry out a thorough analysis of the company’s financial position, taking into account both this exceptional regime and the general legal obligations, in order to avoid potential liability for directors.