Legal Alert: Ex Officio Dissolution of Inactive Companies in Andorra
The Official Gazette of the Principality of Andorra has published Law 17/2026 establishing the procedure for the administrative dissolution without liquidation of inactive commercial companies. This regulation marks a before and after in corporate control in the country and is strictly mandatory.
At Triple A, we have prepared this extensive guide to explain in detail where this law comes from, which companies may be affected immediately, and exactly what you must do to avoid the sudden closure of your business safely and legally.
The International Context: Transparency and Control
To begin with, it should be understood that the approval of this law responds to a firm national priority: the prevention and fight against money laundering and terrorist financing. In fact, Andorra periodically submits to the strict evaluations of the Council of Europe through the Moneyval Committee, as well as those of the OECD Global Forum on Transparency.
Furthermore, the new Law seeks to eliminate what are called empty corporate structures. That is to say, companies that do not carry out a real operational activity, but continue to vegetate without any valid economic motivation, improperly benefiting from the appearance of seriousness and solvency granted by the Register of Companies.
On the other hand, the Government considers that purging this census of inactive companies will help improve the traceability of asset ownership. Consequently, this will contribute to easing the tension in the real estate market, especially in the rental sector.
Objective Criteria: Which Companies Can Be Dissolved?
Pay attention to this point, because the law establishes very precise activation criteria. Specifically, a commercial company can be subjected to an administrative dissolution procedure if it does not have an effective economic activity or any salaried person and, in addition, has failed to comply with two or more of the following obligations for two consecutive accounting years:
- Annual Accounts: Failing to deposit the accounts in accordance with the Law on public limited and limited liability companies.
- Tax Obligations: Failing to file the required returns or being in a situation of a registry blockade is urged by the Tax Administration.
- Ultimate Beneficial Owners: Failing to provide the Register of Companies with the information regarding the identity of the ultimate beneficial owners.
Likewise, the law is clear: partners or beneficial owners cannot use their status as employees of the company to prevent the dissolution. Similarly, registrations that are merely formal or simulated and do not respond to a real employment relationship are not considered effective, although the company will be able to defend itself and prove it during the allegations phase.
How Does the Dissolution Procedure Work Step by Step?
To guarantee legal certainty, the regulations establish a highly regulated process by the Administration:
- Identification Phase: Non-compliant companies are identified by crossing registry data, and the administration body is granted a period of 10 working days to present documents and allegations.
- Opening of the File: If the minister in charge sees precise indications, the procedure is opened. This is notified by certified mail and published in the Official Gazette of the Principality of Andorra (BOPA).
- Verification Phase (CASS): A period of 15 calendar days is open for anyone to report on assets or liabilities. In parallel, the CASS is asked to verify within one month if there are registered employees.
- Final Resolution: It is resolved within a maximum period of 6 months. If there are no assets, administrative dissolution without liquidation is agreed upon. If there are, it is sent to the Civil Section of the Tribunal de Batlles (First Instance Court) to proceed with formal liquidation.
Serious Consequences and Avenues of Appeal
On the one hand, if a definitive administrative dissolution is ruled, all the company’s entries in the Register of Companies and the Tax Register will be cancelled ex officio. On the other hand, administrators considered responsible for the breaches will receive a temporary prohibition from exercising administrative or management functions in any commercial company registered in the Principality of Andorra for a period of one year.
Despite the forcefulness of the law, companies can file an administrative appeal before the Government within one month from the notification. Finally, if there is administrative silence for two months or a dismissive response, the path of administrative jurisdiction will remain open.
New Chart of Stricter Financial Penalties
Parallel to the dissolution, Law 17/2026 modifies Article 106 of the Companies Law to toughen financial fines. Below, we detail the current penalties:
| Infringement committed by the company | Financial Penalty |
|---|---|
| Beneficial Owners: Failure to file the declaration within the legal deadline or to keep it updated. | 2,500 € |
| Beneficial Owners: Submitting incomplete or manifestly incorrect information without fraudulent intent. | 5,000 € |
| Beneficial Owners: Submitting false, misleading information or deliberately hiding identity. | 15,000 € |
| Annual Accounts: Depositing the accounts with a delay of less than 3 months compared to the legal deadline. | 500 € |
| Annual Accounts: Delay of more than 3 months in the deposit. | 1,000 € |
| Annual Accounts: Delay of more than 12 months in the deposit. | 2,000 € |
As a notable novelty, a shortened penalty procedure is introduced. That is to say, if an infringement is notified, the administrator has 20 working days to completely regularize the information and voluntarily pay the fine with a 25% reduction on the proposed amount.
Transitional Provision: The Clock is Ticking
Lastly, it is of vital importance to highlight the transitional provision of the Law. Without exception, all commercial companies that are currently in the situations of non-compliance described have a maximum period of one month from the entry into force of the Law to regularize their situation before the dissolution procedures are activated.
Do you need to regularize the registry status of your company?
In short, proper control of corporate obligations is vital to avoid financial penalties and the administrative dissolution of the company. For this reason, at Triple A we are experts in legal consulting in Andorra and we help you manage the process with total security and within the legal deadlines.
