Geostrategic Chaos and My Corporate Law

Why does Donald Trump’s tariff policy lead to the dismissal of my directors’ liability claim?

In recent days, news has circulated regarding the tariff policy of the United States Government and the responses to it.

On Wednesday, April 9, Royal Decree-Law 4/2025 on urgent measures in response to the tariff threat was published in the Official State Gazette (BOE). The aim of this decree is to mitigate the consequences of the tariff policy announced by the United States Government.

It is worth noting that this Royal Decree was published on the same day that a significant revision of the tariff regime that prompted it was announced. In this context, it is important to point out that the Royal Decree includes a modification to the regulation of the obligation to dissolve commercial companies due to losses.

This regulation, well known to corporate lawyers, essentially provides that any company whose net equity has been reduced by losses to less than half of its share capital must be dissolved. As is well known, failure to comply with this obligation triggers the joint and several liability of the company’s directors for the company’s subsequent obligations.

Now then, during the COVID period, a moratorium was in force regarding losses incurred in 2020 and 2021, which were not to be considered for the purposes of calculating net equity. This moratorium remained in effect until the end of fiscal year 2024.

The Royal Decree published yesterday extends this moratorium until the end of fiscal year 2025. Given that the current fiscal year is already underway, a procedure is established whereby companies that have already drawn up their accounts may reformulate them in light of the moratorium and, therefore, are not required to dissolve.

This extension of the moratorium should be taken into account, and one should not rush into filing a liability claim against directors based on losses as a ground for dissolution. Otherwise, in addition to the negative consequences that the tariff policy is already causing, one might also have to add the possible dismissal of a claim one that has likely required considerable preparation, given the complexity of such actions.